There has been a lot of buying pressure in the Asian indices, and the Nikkei 225 will not be any different. Ultimately, this is one of the better opportunities out there.
Nikkei 225
One quick glance at the Nikkei 225, you can see that there are plenty of buyers in this market. The market is likely to continue to perhaps grind back and forth, and I do think we’re in the midst of forming a bullish flag.
If the Japanese yen continues to get hammered, and I think it will longer term, it’s very possible that the Nikkei takes off. The 58,800-yen level is an area I’m watching very closely. A break above that opens up a much bigger move, probably somewhere in the neighborhood of around 4,000 yen to put us at about 62,800 yen before it’s all said and done.
Economic Stimulus and Regional Support
Short-term pullbacks offer value. The 50-day EMA is starting to reach towards the 54,750-yen level, an area that was a previous resistance barrier and I think will attract a lot of attention.
Regardless, I’ve got no interest whatsoever in trying to short this market. I think it’s a market that will continue to see buyers jump into it as the Japanese government has made it painfully obvious that they are going to do everything they can to stimulate the economy, and therefore I think most of the companies in the Nikkei will be big winners.
Furthermore, you also have regional pressure as well. One quick look at the KOSPI in South Korea tells you the same story. Asian stocks are on fire. The Nikkei is probably the easiest way for most retail CFD traders to play it, so I’m watching this one closely. I do think it’s probably only a matter of time before we break out.
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