Is the Nikkei Still Bullish? - Forex News by FX Leaders

Is the Nikkei Still Bullish?

Posted Thursday, January 26, 2017 by
Dave Green • 1 min read

Good afternoon, fellow traders.

Since last night, the global stock markets are trading massively bullish because of the U.S fundamentals. The Dow Jones Industrial Average (DJIA) managed to reach 20,000 points for the first time ever on Wednesday.

Likewise, the Japanese stock market index, the Nikkei, soared dramatically to trade at 9,402.39, adding nearly +344 points and +1.81% in late Asian and early European session. Nikkei remained supported as the Machinery, Shipbuilding, and Glass sectors drove the index higher.

Particularly, the shares in Tokyo Electron Ltd. surged to all-time highs to trade at 11985, adding 645 points or 5.69%. Moreover, Taiheiyo Cement Corp mounted to 406.5, adding 20 points and  5.17%.

Besides that, as discussed earlier in the morning brief, the investor sentiment turned out to be more optimistic as the President, Donald Trump, provided more details on his policies. Not only that,  he also signed two executive regulations on Tuesday to initiate the construction of the Keystone XL and Dakota Access oil pipelines.

We can see in the chart that the Nikkei broke above of a major resistance level of $19300. The RSI is also supporting the bullish trend along with 20 & 50 periods EMA's.  It's currently trading around  $19470, with a high probability of continued bullish trend. Besides that, we can see the formation of three white soldiers candlestick pattern on a daily chart, signaling a strong bullish momentum.

So considering the technical aspects, I would recommend traders to keep an eye on a significant trading level of $19300, since the breakage above this level is likely to push the market towards $19650. Lastly, investors are recommended to follow trades with proper money management strategy.

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