Nikkei Chart – 30Jul

Posted: 30 Jul 2010, 9:29am (Index: Nikkei Charts)


The Nikkei 225 continued to trend higher on Wednesday and cleared the mid-term downtrend line as well as the 50-day moving average. Yesterday the index paused and shaped an inside day. Next resistance besides Wednesday’s high at 9,760 is the recent high of 9,807. A decisive breach above would establish a double bottom and allow for a continued recovery towards 10,196 (200-day moving average) and 10,252 (June high). Further resistance levels are 9,894 and 10,105.

Next support levels are 9,453 (20-day moving average), 9,254 and 9,176. Key support is coming in at 9,076/9,092. A break below would signal a major top and could trigger downside objectives at around 8,500 and then 7,600.

Strategy:

Aggressive short-term traders may buy the dips. They should exercise a tight cut-loss strategy. More risk averse traders could use a decisive close above 9,807 to go long. Short-positions may be considered in case of either reliable signs of weakness at higher levels or on a confirming decisive drop below 9,076.

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