nikkei 225 potential short term rebound in progress above 1513014990 1818982016

Daily Outlook, Tues 28 June 2016

(Click to enlarge charts)

What happened earlier/yesterday

After a 10% plunge seen in the Japan 225 Index (proxy for the Nikkei 225 futures) from last Thursday, 16668 high to Friday, 24 June low of 14835 reinforced by the vote for Brexti,the on-going decline has managed to stall as expected on the lower boundary (support) of the medium-term “descending range” configuration.

Click here for more details as per highlighted in our latest weekly technical outlook/strategy published yesterday.

Key elements

• The Index has started to evolve within a medium-term “descending range” configuration in place since 25 April 2016 high with its lower boundary (support) now at 14990.
• The 4 hour (short-term) Stochastic has turned upwards and still has room for further potential upside before reaching an extreme overbought level. These observations suggest that short-term upside momentum of price action has resurfaced.
• The near-term resistance stands at 15760/865 which is defined by the former minor swing low areas of 30 April/06 May 2016 and a Fibonacci cluster (see 4 & 1 hour charts).

Key levels (1 to 3 days)

Intermediate support: 15130

Pivot (key support): 14990

Resistance: 15760/865

Next support: 14780/600

Conclusion

Short-term rebound in progress. As long as the 14990 daily short-term pivotal support holds, the Index is likely to see a further push up to target the near-term resistance at 15760/865.

On the other hand, failure to hold above the 14990 short-term pivotal support may invalidate the preferred rebound scenario for a direct drop towards this week medium-term downside target/support at 14780/600.

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