In this article, we are drawing Pitchfork channels on Nikkei
On the weekly Nikkei chart, we can see that the instrument has broken below the median line 22500 level of the long-term uptrend channel and is extending its downside. Near-term resistance is the half of first channel 21000 level. A daily close below the 21000 level will open the downside extension into the channel support 19500 level.
Using Andrews Pitchfork tool hint: to plot Andrew’s Pitchfork on a chart, first look for three consecutive big highs or lows at the asset’s price. These key points are highlighted in the chart below.
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We have used the combination of the top-down trading analysis and the Andrews Pitchfork channels to get to a trading entry stop loss levels and targets. On the daily chart, there is a new clear downside sideways Pitchfork channel and a bounce from here could lead to an upside extension into the 22450 level. You can enter a good risk to reward long trade entry with the stop loss below the 21000 level, targeting 21800 and 22400 level higher. Invalidation of the upside swing will come only on a daily close below the 21000 level.
