Nikkei has broken down from its tight recent range below 22165/125 and closed at 21995 today. The 200-day average at 21900/850 is exposed, then the recent corrective price low at 21580/530 would reassert the corrective potential, per Credit Suisse.
Key quotes
“The Nikkei broke sharply out of its tight recent range of the past week and a half below 22165/125. This turns the focus onto the 200-day average at 21900/850, which hasn’t been a very reliable barometer recently.”
“More important support is seen at the recent low and price gap at 21580/530. Below here would reassert the corrective potential, with next support at the late May breakup point at 20740/735, then the 38.2% retracement at 20585/575. Our attention would start to turn towards signs of a potential floor here if reached, however, we will be watching to see whether MACD turns outright negative and if volume picks up should the downtrend extend to determine if the correction can extend in a more damaging fashion.”
“Near-term resistance moves to the 22105/130 minor range breakdown point, which we ideally look for the market to hold below to maintain the short-term downside pressure. Only above 22665/695 would turn the risks back higher.”
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