Chart of the day

Nikkei is touching the high

Nikkei is testing the upside resistance of 38400 and if we get a break above this level we could see an extension higher to 40000 but we have a long-term wedge resistance here which can lead us to a conclusion that this is the end of the five upside waves.

Only in the case of a clear confirmed break above 38400, will lead to an immediate upside extension in the fifth Elliott wave higher to 40000 and this will be a sign that we are in the extended fifth wave and the whole global stock market is in the bullish phase. A break below 37500 is required to invalidate this.

Long trades could be opened here with a stop loss below 38000 only upon a confirmed break above 38400. Short trades are more advisable here as they have a possible better risk to reward and with a stop loss above 38500. This can be traded with options as well.

Chart of the Day Nikei

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