nikkei 225 updated daily outlook tues 14 june 2016 further potential direct drop below adjusted 1586

(Click to enlarge charts)

What happened earlier

This morning, we have published a daily technical outlook on the Japan 225 Index (proxy for the Nikkei 225 futures) where we expect a minor push up first towards 16120 before hitting the short-term downside target (support) of 15600 (click here to recap). However as the session progressed, the Index did not shape the expected push up and declined lower. It is now coming close to the 15600 level (current intraday low is at 15735).

Below are the updated key short-term elements and adjusted technical levels.

Key elements

• The Index is now evolving within a short-term bearish descending channel in place since 10 June 2016 high of 16698 with the upper boundary (resistance) now at 15860 (see 1 hour chart).
• The key short-term pivotal resistance is now at 16100 which is defined by the pull-back resistance of the former triangle range configuration’s support (depicted in purple) and today’s Asian session high.
• Based on the Elliot Wave Principal and fractal analysis, the Index is likely to be undergoing an extended bearish impulsive wave iii of a minor degree in place since 08 June 2016 high of 16845 with a potential projected target at 15480/330 zone (3.618 Fibonacci projection from 08 June 2016 high and the swing low area of 07 April 2016).

UPDATED Key Levels (1 to 3 days)

Intermediate resistance: 15860

Pivot (key resistance): 16100

Supports: 15600 & 15480/330

Next resistance: 16500

Conclusion

The Index is now coming close to the short-term bearish descending channel’s current support at 15600 where it may see a minor rebound to test descending channel’s resistance at 15860 with a maximum limit set at the adjusted short-term pivotal resistance of 16100. Thereafter, the Index is likely to shape another potential downleg to complete the potential extended bearish impulsive wave iii at 15480/330.

On the other hand, a clearance above the 16100 adjusted short-term pivotal resistance is likely to put the bears on hold for a further snap-rally towards the next resistance at 16500.

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