Elliott Wave analysis: Nikkei Futures (NKD) continues lower in a fresh bearish leg [Video]

The short-term Elliott Wave outlook for Nikkei Futures (NKD) suggests that the index has resumed its decline and remains within a developing bearish sequence. The price structure from the October 6 high continues to support a negative bias. Since that peak, the market has established a lower-low sequence, reinforcing the view that sellers remain in control. The decline is unfolding as a zigzag correction, a pattern that often precedes an extended move in the direction of the prevailing trend.

From the October 6 high, wave A completed at 61,680. The index then staged a recovery in wave B, which ended at 65,525, as illustrated on the 1-hour chart. Although the bounce was notable, buyers failed to sustain momentum above the wave B peak. As a result, selling pressure returned and shifted the focus back to the downside.

Following the completion of wave B, the index resumed lower in wave C. The subsequent break beneath the wave A low at 61,680 confirmed that the next bearish leg had begun. This breakdown also strengthened the case for further weakness in the near term. At present, wave C appears to be unfolding as a five-wave impulsive structure, which is typically associated with strong directional movement.

Within wave C, wave ((i)) finished at 61,890. The market then produced a corrective rally in wave ((ii)), which ended at 63,925. Since completing that correction, the index has continued to weaken, favoring additional downside extension.

In the near term, the key pivot remains the 65,525 high. As long as price stays below this level, rallies are expected to attract sellers. Any recovery should ideally unfold in three or seven swings before the broader decline resumes. Therefore, the Elliott Wave structure continues to favor further downside while the October 6 cycle high remains intact.

Nikkei Futures (NKD) 60-minute Elliott Wave chart

NKD Elliott Wave [Video]