The Nikkei is approaching historical resistance again. Are we expecting a significant correction ( 32 - 60 %) ??? What does it mean for the Yen ??
Cheers
Algo
As Kuroda's main kamikaze-aim is to trash the Yen @ a rate of 60 bln$ per month, by pushing inflation regardless of the risks, the Nikkei is acting in a full Giffen good move heading to 16k. It would not be the first time for June to become a top for the Japanese equities. Weekly RSI @ 94 is way overbought and unprecedented in at least 20yrs.
We are long due to the bias from the government support, however as we edge closer to the noted levels we are going to see some level of sideway movement if not correction.
Attack this market on the LONG side .. while onlookers stare in shock and awe & stay on the sidelines ... KEEP BUYING. No reason for this market to give back gains .. imo BOJ will expand QE programme into larger purchases of index linked ETFS & other equity related instruments.
I favour buying leading names in the N225 .. BANKS/ELECTRONICS/AUTOS/INDUSTRIAL...
The Nikkei has consolidates itself under 12600 resistance. If Bank of Japan will disappoint the market at the next policy meeting we might see a drop in the index price. See the setup on our site www.investazor.com
The elections on Sunday, could very well be a buy the rumor sell the news type of event. The markets have priced in the postive outcome of a dramatic Monteray policy change to further easing. On a technical basis, the USDJPY is the driver of the market, correlation is 1.0 with the NIKKEI 225. so any selloff in the near term will obviously affect the NIKKEI 225....
