nikkei 225 weekly outlook 28 sep to 02 oct turn neutral between 18120 and 17160 1426642015

(Click to enlarge charts)

What happened last week

The Japan 225 (proxy for the Nikkei 225) has pull-backed and held above the 17160 weekly pivotal support as expected.

The Index has rallied by 5.4% from its 17160 weekly pivotal support to print a high of 18128 on last Friday, 25 September 2015. During the same Friday’s U.S. session, the Index lacked the upside momentum to follow through and gave up almost a third of its gain recorded in the Asian/European session.

Please click on this link for a review on our previous weekly outlook.

Key elements

• The Index is still holding above the “Black Monday”, 24 August 2015 low of 17160 which is considered as a significant support as it confluences a long-term trendline support (in dark blue) in place since 14 October 2012, the pull-back support (in dotted purple) of a former 17 months range bullish breakout and the low of the weekly bullish “Hammer” candlestick pattern (see weekly chart).
• The weekly (long-term) RSI oscillator is still holding above its support (see weekly chart).
• The key intermediate term resistance stands at 19190 which is defined by the 200-day Moving Average (in orange) and the former support joining the lows of 01 April 2015, 07 May 2015 and 09 July 2015 now turns pull-back resistance (in brown) (see daily chart).
• The daily (intermediate term) RSI oscillator remains bearish below its resistances (see daily chart).
• On the short-term, the Index appears to be capped by a descending trendline (in pink) in place since 29 August 2015 high now resistance at 18120 (see 4 hour chart).

Key levels (1 to 3 weeks)

Support: 17160 & 16400/16000

Resistance: 18120, 18660/18740 & 19190

Conclusion

The Index is still evolving within a range configuration with key lower limit (support) at 17160 and upper limit (resistance) at 19190.

From a medium-term perspective (1 to 3 weeks) technical elements are getting mixed, thus we have decided to turn neutral for now between 18120 and 17160. Only a bullish breakout above 18120 is likely to trigger a potential upside movement towards 18660/18740 before the key upper limit of the range configuration at 19190.

On the other hand, a break below 17160 (key lower limit of the range configuration) may see the continuation of the downtrend in place since 11 August 2015 to target the next support at 16400/16000 (see daily & weekly charts).

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.