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10 August

By Amir El Araby

Category: Technical Analysis

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Nikkei: Bulls thwarted at PRZ of bat pattern; more debasement in store

Nikkei 225 has dropped yesterday after placing the short-term significant high of 20375.00 influenced by the report about Russian hacking into a US company that provides voting machines.

Actually, bears have been waiting in the zones of 88.6% Fibonacci retracement of the XA leg of the suggested bearish harmonic bat pattern. 

Since the aforementioned high may act as the PRZ (Potential Reversal Zones) of the harmonic pattern and with the negative divergence appearing on RSI 14, we believe that additional debasement could be seen on Nikkei 225 over upcoming period.

Technical targets are located in the 19630.00 (classical resistance turned into support); whilst the main objective resides at 19070.00 and 18250.00 (Fibonacci level of CD) in case the index fails to place a new high.

Amir El Araby

Financial advisor with 18 years’ experience in the technical analysis studies for FOREX, Commodities and Indices. Amir El-Araby worked as a mentor for many companies and institutes, where he presented new methods for trading in the financial market. Amir is a member of ESTA (Egyptian Society of Technical Analysts).