Nikkei 225: Are the Bulls Still Going Strong?

Published On: 9 October 2023, 09:15 AM | Annabelle Tang, Dealer

Trade Set-up:
  • From the chart above, we see that Nikkei 225 has been trending downwards since 15 September 2023 in which it has hit the low price point of 30250 on 4th October 2023.
  • Since then, prices have slowly been trending upwards. It might be interesting to note that the low price range of 30250 on 4th October 2023 was last seen in May 2023.
  • By understanding the logic behind trading heuristics and how it affects the microstructure of trading i.e. technical analysis (support/resistance, how price patterns tend to repeat itself), we deem it likely for prices to resume its previous behaviour and start trending upwards once again, as it did in May.

Trade Execution:
  • Traders can long above the green line, and set a stop loss that is 1/3 of the potential take profit accordingly.
  • If traders are able to hold onto longer term positions, then we recommend the stop loss to be placed at 30230, and partial take profit at 33,250, then final take profit at 33,500.
  • Alternatively, if prices begin falling below 30200, traders may wish to wait out a little longer and observe before shorting due to the possibility of Nikkei 225 wiping out all of its earlier gains (which started in June) as it retraces back to the price it was trading at for the past 3 decades.