Down In the Rice Paddies: A Look At The Japanese Market
Dragonfly Capital | Nov 20, 2013 12:47AM ET
The Japanese stock market has been poised for a big move since early this summer. The tool of choice to trade this here, Japan MSCI iShares, EWJ, has been building a tight coil since then and may be ready to pop. But just what will it take? Take a look at the chart.
The ETF has been building a rising wedge since June. The bottom bound has coincided with the 150 day Simple Moving Average (SMA), and the top is nearly flat, but with very slightly higher highs on each touch. There is a last stab at resistance if it were to move over the wedge at the may highs and then lots of room to move higher. It is setting up well to break higher but there are some things to watch for to confirm it. First the Bollinger bands which have been moving sideways need to shift to pointing higher. The RSI and MACD need to continue to move higher as well. They both currently support a break out higher but reversing lower could signal it is not ready yet. The volume is building and if it continues that could also be a sign of the breakout. The most troublesome indication is that the last two candlesticks have bee dojis, signalling indecision, at the wedge resistance line. A move lower would signal the indecision resolving to the downside, a break of the wedge, resolution to the upside. If the latter occurs wait for further confirmation of a new high over the May 22 high, to get involved.
Disclaimer: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.