nikkei 225 short term technical outlook further potential upside above 17165 support 1834912016

Fri, 21 October 2016

(Click to enlarge chart)

What happened earlier/yesterday

The Japan 225 Index (proxy for the Nikkei 225 futures) has rallied within our expectations and surpassed the short-term upside target at 17165 (printed a high of 17290 in yesterday’s, 21 October U.S. session.

Please click here for a recap on our previous short-term daily technical outlook/strategy.

Key elements

• The former intermediate range top in place since 31 May 2016 at 17165 has been surpassed and now turns into a pull-back support (see daily chart).
• The aforementioned pull-back support of 17165 also confluences closely with the 23.6% Fibonacci retracement of the recent up move from 13 October 2016 low of 16668 to yesterday’s U.S. session high.
• The next resistance to watch will be at 17500/700 which is defined by the significant descending trendline resistance from August 2015 high and bullish “basing” formation neckline resistance (see daily chart).
• Short-term upside momentum remains intact as the hourly Stochastic oscillator has just exited from its oversold region.

Key levels (1 to 3 days)

Intermediate support: 17225

Pivot (key support): 17165

Resistance: 17500

Next support: 17170

Conclusion

Maintain bullish bias above 17165 short-term pivotal support for a further potential push up to target the next resistance at 17500.

However, a break below 17165 is likely to negate the bullish tone for a deeper pull-back towards the next support at 17170 (former minor swing high areas of 14, 18 and 19 October 2016.

Charts are from City Index Advantage TraderPro

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