Nikkei 225 fails at resistance, moves closer to correction
MACD prediction for Nikkei 225 moving closer
We see a correction coming for Nikkei 225 which we first published late August. In that story, we reported that Nikkei 225:
- Shows MACD bearish signal on the monthly chart.
- Approaches a very long term, significant trend line that acts as resistance.
- MACD on weekly chart also approaches its zero-axis which is a signal for trend change.
We also reported that
When signal appears before index/price movement, signal is a warning sign.
Based on price action, Nikkei is moving closer to confirming this warning.
Technical picture for N225 at this moment
- Index fails 52-week high at 16320 printed late last year as well as 15942 printed in May 2013.
- This action leaves buyers in Week 38-40 inside a bull trap.
- Bearish divergence in MACD remains very clear.
- To confirm correction, price should fall below trend lines (black and blue) in chart as well as MACD to cross decisively below zero.
Finally reinforcing our observation in monthly chart.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
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