nikkei 225 short term technical outlook upside movement to resume above 17900 1838122016

Fri, 18 Nov 2016

(Click to enlarge chart)

What happened earlier/yesterday

The Japan 225 Index (proxy for the Nikkei 225 futures) did not shape the minor pull-back and pierced above the 18000 short-term pivotal resistance in the U.S. session which suggests a resumption of the bullish movement in place since the 09 November 2016 low (washed out of the bears triggered by the U.S. presidential election).

Key elements

• Price action of the Index has started to evolve within a short-term bullish ascending channel in place since the 11 November 2016 minor low of 17270 (also the end of the minor degree corrective wave 2).
• The lower boundary (support) of the aforementioned bullish ascending channel now stands at 17900 which also confluences with the former minor range top formed from 16 November to 17 November 2016 and the 23.6% Fibonacci retracement from the minor degree corrective wave 2 low of 17270 to yesterday’s U.S. session high of 18111.
• The hourly Stochastic oscillator has just exited from its oversold region which suggests that short-term upside momentum of price action has resurfaced.
• The short-term significant resistance stands at 18400 which is defined by the upper boundary of the aforementioned bullish ascending channel and the 0.764 Fibonacci projection from the 09 November 2016 low of 16097.
• Based on the Elliot Wave Principal and fractal analysis, the Index is likely to be undergoing a bullish impulsive minor degree wave 3.

Key levels (1 to 3 days)

Pivot (key support): 17900

Resistances: 18200 & 18400

Next support: 17600/490

Conclusion

Turn bullish with key short-term pivotal support at 17900 for a further potential push up towards 18200 before 18400.

However, failure to hold above the 17900 pivotal support is likely to invalidate the preferred bullish bias for a further slide to retest the 17600/490 pull-back support of the former trendline resistance from 21 June 2015 high.

Charts are from City Index Advantage TraderPro

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