The Nikkei 225 has come out of the gates with more positive action today and continues to display an ability to gap higher.
Global risk appetite appears to be increasing and the Nikkei 225 Index is enjoying a positive ride higher as it creates better value for investors. Speculators looking at technical charts will be able to see the Japanese index has created gaps higher as strong buying floods into the market. Resistance levels at this point have become hypothetical because the Nikkei Index is trading at value junctures it has sincerely not tested for almost thirty years.
Call it euphoria, perhaps even over-exuberance, but going against the trend of the Nikkei 225 could prove to be a dangerous proposition short term. Global risk appetite is showing its teeth and this week could produce new record highs on many international indices. If this occurs, expect the Nikkei to enjoy a ride higher too. Speculators will need to certainly be careful; the Japanese index is capable of reversing lower and testing short-term support if profit taking raises its head.
However, buying the Nikkei 225 Index appears to be the speculative correct decision. Choosing take profit levels may prove troublesome because of the ability the index has shown to gap higher, but getting knocked out of a trade with a solid market fill in your favor can be worthwhile. The important juncture of 26,000.00 is certainly being targeted and traders may want to be careful of this ratio because it might produce volatile movement, particularly if profit taking has been programmed into the Nikkei 225 at this level. With the notion profit taking could take place, traders should also consider the possibility that if the Japanese index does manage to topple the 26,000.00 level it could ignite more buying short term.
The Nikkei 225 is trading near important resistance currently which is psychological in nature, and these numbers have no doubt been filtered into programmed trading software because of human bias. If the index challenges the 25,950.00 level higher and is able to sustain its value above this juncture the Nikkei 225 may be ready to increase its value significantly.
Traders should keep their eyes on US futures, which are indicating a solid opening. Solid trading results from the US could be an additional catalyst for the Nikkei 225 later today and tomorrow and create an even more dynamic trading environment.
Nikkei 225 Index Short Term Outlook:
Current Resistance: 25,950.00
Current Support: 25,880.00
High Target: 26,025.00
Low Target: 25,820.00