Nikkei indicators point to a downward continuation – FXStreet

By FXStreet Japan’s Nikkei fell on Monday, dropping 102 points to close at 16.911.32, hit by profit taking after last week’s rally. Risk turned off at the beginning of the week as during the weekend, China cut its growth forecast, from previous 7% to 6.5% to 7% this year, resulting in a slide in local share markets.

Sentiment, however, improved as the day went by, tracking the sharp recovery in commodities. Leading the upside were consumer-electronics outfit Sharp, up 7.28% on merger reports with Taiwan’s Foxconn, and then electronics-house Toshiba that surged 7.02% on a possible sale of unit. TV-broadcaster Sky Perfect was the biggest loser, down 4.94%.

Nikkei technical view

“Heading into Tuesday, the index declined further, now hovering around 16,800, and in the daily chart, the technical indicators head lower towards their mid-lines, retreating from overbought levels and increasing the risk of a continued decline,” said Valeria Bednarik, chief analyst at FXStreet. “Shorter term, in the 4 hours chart, the index is currently below a horizontal 20 SMA, while the technical indicators have turned flat around their mid-lines, lacking certain directional strength.”

Support levels: 16,757 16,692 16,623. Resistance levels: 16,842 16,907 16,990.
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Source:: FX Street