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A Potential Trade Setup In The Nikkei

Today in the Asian trading sessions, the global stocks are trading in a mixed fashion. However, the Japanese Index Nikkei recovered from losses to trade at $19,177. Recalling our previous live market update on Nikkei signal, it hit our take profit at $19050 and helped us secure 68 pips.


Two Reasons Behind a Bullish Pullback

Firstly, two big companies including Fujitsu and Lenovo Group were supposed to tie-up their personal computer business. They eventually declared the deferment of their target date for a final deal. Due to this, the shares of Fujitsu advanced 2.70% along with Lenovo, which soared 1.23% in a single day.

Secondly, the index edged higher above a double bottom pattern which has provided a strong support to Nikkei at $18901. Refer to our previous post entitled Nikkei Slips Below Support – Is this because of Trump?

Nikkei 4-Hours ChartNikkei 4-Hours Chart


Technical Outlook

We can see in the hourly chart that the Nikkei is holding below a descending trendline, which is sharing a resistance at $19189. Although, it's above 50 EMA and the RSI (at 63) is also signaling a buying entry, we should remain patient. We never know which way the market is going to breakout, especially, when there is no strong fundamental.

Trading Signal: I'm looking to enter a sell position below $19290 with a stop loss at 19340 and a take profit at $19075.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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