NIKKEI 225 facing the critical upside resistance
Nikkei has bounced off the medium-term uptrend channel support 18500 level as it can be seen on the monthly chart. It is in a newly formed Andrews Pitchfork downtrend channel that rejected the Index from the recent 12 years high 23890 level for a reversal downside. A strong downside resistance is visibly marked at the 18600.
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On a daily chart, price action in the Nikkei 225 indicates a possible short-term top forming. We can see a rising wedge (usually bearish) formed with the uptrend support coming at 20000 which will be a strong downside resistance and a wedge break test. If 20000 gives up our short target is 19500 followed by 19000 Our trading system is indicating a potential of 200-500 points of profit per share traded. Look for the short trade entries with the stop loss just above 21000.
We have used the combination of the top-down trading analysis to get these key levels explained in the charts.
