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While equity markets have rallied strongly, the Nikkei has been behaving itself. The Japanese Index is stuck in a tight range between 20420 resistance and 20255 support. While the range certainly can’t last forever I think it still offers more opportunity.

Overall I feel that we are clearly overbought and I expect a slight correction in the coming days. That said markets have a habit of drifting higher and crushing volatility.

I’m happy to sell at the 20420 level for a short-term trade, however, keep those stops tight as we still have the potential to break out higher.

 

Nikkei – 240 min Chart.