Nikkei 225 Technical Analysis: Sharp Falls Leave Bulls Down, Not Out

Nikkei 225 Technical Analysis Talking Points:

  • The Nikkei 225 has shed nearly 2000 points since the end of September
  • However it remains quite close to significant highs
  • Bulls need to defend near-term support to keep hopes alive

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The Nikkei 225 is of course sharing fully in the current bout of global risk aversion which has sent equity lower across the board.

The Tokyo stock benchmark has fallen more than 1,700 points since the end of September, with particularly sharp falls seen in the past week. Technically speaking the index has now retraced nearly all of the sharp up-move seen since September 9 and is now back within the broad trading range which previously held sway between then and mid-May.

Nikkei 225 Daily Chart

Of course, we must keep a sense of perspective. The recent, October 1 peak was the highest point the index had reached since late 1991 and with that in mind the current slide doesn’t look as bearish as it might. Indeed if

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