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.