Nikkei Shows Potential Reversal Signals
|The Nikkei 225 index in its daily chart exposes an ascending channel that shows the Japanese index completing a second bullish leg.
In this post, we will disclose some factors suitable for a bearish trade setup.
-
The long-term ascending channel has a similar structure that completed a bullish five-waves sequence.
-
Currently, a congestion zone is holding the Japanese index. The extension of this zone ranges between 23,330 pts and 23,635 pts. This area could act as an exhaustion zone.
-
The bearish position will activate if price breaks and closes under 23,150 pts. Our conservative scenario foresees a profit target at 22,810 pts. The second profit target level is at 22,550 pts, and the third profit level is at 22,250 pts.
-
The sell-side scenario will be invalid if the price continues rising above 23,405 pts.
-
The risk, Nikkei, remains in an uptrend. A reversal setup could be weighted if price action demonstrates weakness on the current bullish leg.
Trading Plan Summary
-
Entry Level: 23,150 pts.
-
Protective Stop: 23,405 pts.
-
1st Profit Target: 22,810 pts.
-
2nd Profit Target: 22,550 pts.
-
3rd Profit Target: 22,250 pts.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.