NKY breaks below key technical support level
Nikkei 225 Index (NKY) Technical Analysis Report for Dec 06, 2018 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, NKY ended Thursday at 21501.62 tanking ¥417.71 (-1.91%). Today's close at 21501.62 marks the lowest recorded closing price since October 30th. Closing below Wednesday's low at 21708.82, the Nikkei confirmed its breakout through the previous session low after trading up to ¥401.10 below it intraday.
Daily Candlestick Chart (NKY as at Dec 06, 2018):
Thursday's trading range has been ¥497.30 (2.28%), that's far above the last trading month's daily average range of ¥249.67. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NKY.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 21613.53 (now R1), which is likely to act as resistance going forward. The last time this happened on Tuesday, NKY lost -0.53% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Trading close to October's low at 20971.93 we could see further downside momentum if potential sell stops at the level get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Nikkei 225. Out of 161 times, NKY closed higher 57.14% of the time on the next trading day after the market condition occurred.
With five out of the other six Major World Indices closing lower today, the ones that stand out on the negative side are DAX losing -3.48% and FTSE closing -3.15% lower. On the flipside the best performer has been NDX closing 0.64% higher. Read more