Nikkei 225 (NIKKEI.NDX)

Short term

Nikkei 225 has broken down through the floor of the falling trend channel in the short term, which signals an even stronger falling rate. The negative development, however, may give rise to short term corrections up from today's level. There is no support in the price chart and further decline is indicated. In case of a positive reaction, the index has resistance at 36800 points. RSI is below 30 after the falling prices of the past weeks. The index has strong negative momentum and further decline is indicated. However, particularly in big stocks, low RSI may be a sign that the stock is oversold and that there is a chance for a reaction upwards. The index is overall assessed as technically negative for the short term.

Recommendation one to six weeks: Negative (Score: -91)

Medium term

Nikkei 225 is within an approximate horizontal trend channel in the medium long term. This indicates that investors are uncertain and waiting for signals of further direction. A break upwards will be a positive signal, while a break downwards will be a negative signal. The index has received a negative signal from the moving average indicator, thus signaling a continued fall. The index is testing support at points 33500. This could give a positive reaction, but a downward breakthrough of points 33500 means a negative signal. Volume has previously been low at price tops and high at price bottoms. This weakens the index and indicates increased chance of a break down. RSI below 30 shows that the momentum of the index is strongly negative in the short term. Investor have steadily reduced the price to sell the index, which indicates increasing pessimism and continued falling prices. However, particularly in big stocks, low RSI may be a sign that the stock is oversold and that there is a chance for a reaction upwards. The index is overall assessed as technically neutral for the medium long term.

Recommendation one to six months: Hold (Score: -2)

Long term

Nikkei 225 shows strong development within a rising trend channel in the long term. Rising trends indicate that the market experiences positive development and that buy interest among investors is increasing. A head and shoulders formation is under development. A decisive break of the support at 32166, ideally with an increase in volume, signals a further fall. The index has support at points 30800 and resistance at points 40000. Trading volume has increased substantially lately. This shows there is an increased interest for the index, possibly because of fundamental news. The index is overall assessed as technically positive for the long term.

Recommendation one to six quarters: Positive (Score: 59)