2 Reasons of a Bearish Nikkei Today
Dave Green • 1 min read
The global stock markets are trading mixed on today as it seems like the investors are looking for further clues to determine the market trend. Previously, we have seen quite a strong bullish move in the overall stock market due to better than expected labor market figures from the United States. The Japanese Index, Nikkei, is also following in the footsteps of the U.S stock market index. Particularly, a good correlation exists between the DJIA and Nikkei.
Although Nikkei is trading bullish at $19,633.75, up +0.15% in the Asian trading session, the buyers seem to be exhausted because of fundamental and technical reasons.
Firstly, the investors lowered their bets on Nikkei after disappointing figures on the industrial activity. It measures the economic health and increases an investor's confidence towards future prospects. The figure missed the forecast by releasing a 0.0% growth.
Secondly, the Nikkei struggled to cross the triple top resistance level of $19660 on the daily chart. Moreover, the index is already overbought (RSI at 70) and it should retrace back before we see further buying into it.
Nikkei Signal: I'm selling the index below $19659 with a stop loss above $19700 and a take profit at $19550. Make sure to follow strict money management strategies and a trailing stop loss method.