Nikkei225 - is today's fall below 70,000 level a healthy correction or start of bullish reversal?
🔻The $Nikkei 225 Index(N225.JP)$ September futures index is down 1% to 69,100 to take its 2-day fall to 4.6% and further below the psychological 70,000 level
The pullback over the last two days comes on the back of the technical indicator Relative Strength Index (RSI) hitting a 52-week high of 73 on 22 June where the Nikkei225 touched a fresh record high of 72,832
🖥According to Bloomberg, this RSI level meant that the index was firmly in overbought territory
Back in 27 Feb when the RSI of the Nikkei225 reached above 70, the index saw a sharp 12% correction into its March low of 50,558
Meanwhile, Bloomberg makes the observation that the technical MACD line has crossed below the signal line (histogram negative at -165), generating a bearish crossover — the first since early Mar
Both the MACD and signal lines remain in strongly positive territory (above zero), meaning the longer-term trend is still bullish, but the crossover signals that short-term momentum is fading
‼ Bloomberg AskB suggests some key technical levels to watch in the Nikkei225 Index:
Today's intraday high of 69,610 which serves as a near-term resistance
The next resistance level to watch out after will be the 52-week high of 72,832
The 20-day moving average of 68,295 which serves as a critical near-term support
The 50-day moving average of 64,305 which is the key medium term support
Investors keen to trade either direction of the Nikkei225 in the short term may wish to consider these newly listed (last Friday) trending warrants:
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Trending Nikkei225 call $NKY 88000MBeCW261211(JSNW.SI)$ : https://warrants.com.sg/tools/livematrix/JSNW
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Trending Nikkei225 put $NKY 57000MBePW261211(RAGW.SI)$: https://warrants.com.sg/tools/livematrix/RAGW
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