Nikkei 225 Opens the Week with a Market Downside Gap
Dave Green • 2 min read
Japan’s Nikkei 225 Index started the week with a downside gap, erasing last weeks gains and closing at 19,470. Major losses appeared in the Warehousing, Steel, and Finance & Investment sectors, resulting into a steep drop at the start of first day of week. To some extent, the start of lunar New Year long holidays helped to fuel for downside gap.
At the close in Tokyo today, the Nikkei 225 fell 0.54%.
However, the USD/JPY pair stands at a strong support level of 114.20. The weaker Yen is always a good recipe for the Japan’s economy to boost the profit of exporters. U.S. dollar and the Nikkei 225 have a very good positive correlation.
The best performers at the close of today session were Asahi Group Holdings Ltd., Isetan Mitsukoshi Holdings Ltd., and Alps Electric Co. Ltd., as seen.
The worst performers at the close of today session were Toshiba Corp. J.Front Retailing Co., Ltd. and NTT Docomo, Inc. who suffered losses at the close of Mondays session.
Let’s have a look at Nikkei 225 daily chart given below:
Nikkei 225 daily chart.
Last week, the Nikkei closed above 19,100, which is the strong support level, forming a pattern to start a new rally. The level of 19,100 is proven to be a good support level and has been tested multiple times in the recent months of December and January.
The best time to buy the Nikkei225 is when it will falls below 19,100 within this week and produce the bottom or gives a close in the daily chart below this level at 19,100. It can even skid below 19,000, so just wait and see the market reaction at this level of 19,000. Let it produce at the bottom and have your trade. Keep an eye out; good trades are suppose to be inviting you but under the umbrella of a highly volatile week.