Market News & Analysis

Top Story

Featured Trade: Bearish reaction in Nikkei 225 below key MT resistance

Short-term technical outlook on Japan 225 (Thurs 07 Feb)



Click to enlarge charts

Key technical elements

  • Since its 31 Jan 2019 low of 20639, the Japan 225 Index (proxy for the Nikkei 225 futures) has continued to its slow grind upwards within an average tight range configuration of 280 points, the lowest since the start of the rebound from 26 Dec 2018 low of 18970 within a minor bearish “Ascending Wedge” range configuration (see 4-hour chart).
  • It has printed a recent minor high of 20983 on 05 Feb 2019, U.S. session right below the 21020 key medium-term pivotal resistance (click here for a recap on our previous weekly technical outlook), also the upper boundary of the medium-term descending channel from 01 Oct 2018 high of 24478 before it reversed down and broke below the minor “Ascending Wedge” support in today, 07 Feb Asian session (see 1-hour chart).
  • 4 and 1-hour Stochastic oscillators continue to inch downwards and still has not reached their respective extreme oversold levels. These observations suggest that short-term downside momentum of price action remains intact and not “overstretched” at this juncture.
  • Key short-term resistance stands at 20920 which is defined by the pull-back resistance of the former minor “Ascending Wedge” range support from 26 Dec 2018 low.
  • The significant near-term supports rest at 20510/450 (23.6% Fibonacci retracement of the rebound from 28 Dec 2018 low to 05 Feb 2019 high & minor swing low of 24/29 Jan 2019) and 20200 (38.2% Fibonacci retracement of the rebound from 28 Dec 2018 low to 05 Feb 2019 high & former swing high area of 27 Dec 2018)

Key Levels (1 to 3 days)

Intermediate resistance: 20860

Pivot (key resistance): 20920

Supports: 20510/450 & 20200

Next resistance: 21020 (medium-term pivot)

Conclusion

The Index may see a further push down below the 20920 key short-term pivotal resistance to target the near-term support of 20510/450. A break below 20450 opens up scope for a further potential decline to test the next support at 20200 (also the medium-term downside trigger level).

However, above 20920 negates the bearish tone for another round of choppy push up towards the 21020 key medium-term pivotal resistance.

Charts are from City Index Advantage TraderPro




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 report, 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.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

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.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.