It's Touch And Go With The Nikkei
Gregory W. Harmon | Feb 02, 2016 11:18AM ET
I’ve noticed recently that the Japanese Nikkei 225 has been doing a lot of touch and gos. In fact for 20 years it has been doing touch and gos against a falling trend line resistance, as shown in the chart below. Since 1996, every time the Nikkei touched the falling line it fell back. Sometimes further than others, but each time -- in 2000, 2007 and 2013 -- it pulled back. That changed in 2014 when it broke through to the upside.
Since then it moved higher for several months but then started a pullback. Last month the Nikkei had another touch and go, hitting that same extended line, now acting as support and then rebounding back higher. In technical analysis we call this a retest. And when this happens and is confirmed, by a follow up the next period with a reversal back higher, it is a very bullish signal. Keep your eyes on the Nikkei the rest of the month. A close at the end of February over 17518.30, where it closed January, could mean big things for the Japanese market.
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.