nikkei 225 daily outlook wed 30 sep potential push up towards upper limit of descending wedge 144446

(Click to enlarge chart)

Key elements

• Since the high of 28 August 2015, the Japan 225 (proxy for the Nikkei 225) has appeared to be evolving within a ‘Descending Wedge” range configuration with its upper limit (resistance) at 17955.
• The ‘Descending Wedge” chart configuration usually appears at the end of a swift and steep downtrend that indicates a “slowdown”  in downside momentum as the magnitude of the “lower lows” is less than the magnitude of the “lower highs”.
• Price action has managed the staged a rebound yesterday from the lower limit of the “Descending Wedge” at 16890 and traced out a “higher low” at 17060.
• The hourly (short-term) RSI oscillator has inched above its 50% neutrality level which suggests a revival in short-term upside momentum.

Key levels (1 to 3 days)

Pivot (key support): 17060

Resistance: 17800/17955

Next support: 16890 & 16400

Conclusion

As long as the 174060 daily (short-term) pivotal support holds, the Index may see a push up to target the upper limit of the “Descending Wedge” range configuration at 17800/17955.

However, failure to hold above the 17060 pivotal support is likely to see a retest of yesterday’s low at 16890 and a further decline towards the next support at 16400.

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