A Potential Trade Setup In The Nikkei
Arslan Butt • 1 min read
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 Chart
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.