Nikkei 225 has seen a very aggressive and admittedly completely unexpected reversal back above the 200-day average and near-term resistance at 22350 and analysts at Credit Suisse now look for a period of consolidation below the 23185 high.
Key quotes
“The Nikkei has immediately and admittedly very surprisingly reversed its earlier breakdown below a whole cluster of key support levels including the 200-day average at 21765, as well as breaking back above gap resistance at 22350. This should remove the risk of a deeper setback and has almost certainly left positioning cleaner in both directions.”
“Next resistance now moves to 23185, which may now prove a tough barrier, particularly with the pre-pandemic gap just above at 23385 and with MACD also crossing below MACDA for the first time since March. This is consistent with a more neutral short-term trend and the potential for further near term consolidation. Post this though, an eventual break beyond here would open the way for a test of 23805 next.”
“Near-term supports move to 21900, then 21530. Below here would reassert the corrective potential, with next support seen at the late May breakup point at 20740/735, then the 38.2% retracement at 20585/575. Our attention would start to turn towards signs of a potential floor here if reached.”
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