Another Gap in Nikkei – Is it Time To Buy or Sell? - Forex News by FX Leaders

Another Gap in Nikkei – Is it Time To Buy or Sell?

Posted Wednesday, March 29, 2017 by
Arslan Butt • 1 min read

Today, the Japanese stock market index, the Nikkei opened low, with a huge gap at $19189 after closing at $19302 yesterday. This is because investors buckled up before the major event of Article 50, which was triggered by the U.K government earlier today.

The drop in Nikkei figures wasn't only because of Article 50, but also due to the Japanese retail sales figures which were released in the early Asian session. The figures were weaker than anticipated with a 0.1% expansion in February – lower than the expected figure of 0.7%.

Nikkei Index 30- Min Chart Nikkei Index 30- Min Chart

Technical Outlook

For now, the index is consolidating in a brief trading range of $19094 – $19216. However, we can see in the 4-hour chart that the Nikkei is holding below 50 periods EMA along with the RSI at 49. The technical side is signaling the sell trades, but we definitely can't ignore the gap in prices. As we know, the gaps are meant to get filled. This could happen tomorrow or next week. There's no way to know!

Nikkei Signal: During the European session today, we opened a sell trade at $19144 with a stop loss at $19230 and a take profit at $19095. I know the market placed a low of $19093, but our trade did close at taking profit level, probably due to spread.

Things like this happen, that's why we need to play it safe and always trail stop loss at a breakeven level once our trade is yielding a sufficient profit.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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