Nikkei 225 Technical Analysis: 2016 Rising Trend Line Still Holds

Nikkei 225 Technical Notes:

  • Nikkei 225 dropped more than 7.2% last week, largest correction in almost 2 years
  • This decline conveniently paused on a long-term rising trend line from June 2016
  • Immediate resistance stands around 22,227 while support seems to be about 21,013

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The Nikkei 225 declined more than 7.2 percent last week as aggressive risk aversion struck the markets. It was back in April 2016 that we witnessed such a remarkable correction just as large as this one, almost two years ago. As of Monday, the index pulled back from its late-September low of 20,543 from the prior week.

On a daily chart, the Nikkei 225 has been heading lower since the January 23rd high of 24,192. In the lead up to this correction, negative RSI divergence built up. Soon after, the index fell below a near-term rising support line that goes back to October 2017 (dotted blue line on the chart below).

From here,

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