A Look at the Nikkei

By: Ed Carlson | Tue, Dec 3, 2013
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In October 2012 I showed subscribers the relative chart of the Nikkei 225 versus the MSCI world index and explained how the breakout over a declining trendline, which was showing on the chart at that time, suggested great times ahead for the Japanese stock market. Since then the Nikkei has advanced 76%.

Looking at a monthly chart of the Nikkei we see it has advanced past the minimum expected move to 14,500 forecast by the bullish flag formation and has reached the descending trendline from the high in June, 1996 as well as the 76.4% retracement of the 2007 decline.

While a further move to the May high near 16,000 wouldn't surprise me, the bull market of the last year may be finished and prudence calls for moving to the sidelines until NKX manages to exceed and hold these levels.

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Ed Carlson

Author: Ed Carlson

Ed Carlson
Seattle Technical Advisors.com

Ed Carlson

Ed Carlson, author of George Lindsay and the Art of Technical Analysis, and his new book, George Lindsay's An Aid to Timing is an independent trader, consultant, and Chartered Market Technician (CMT) based in Seattle. Carlson manages the website Seattle Technical Advisors.com, where he publishes daily and weekly commentary. He spent twenty years as a stockbroker and holds an M.B.A. from Wichita State University.

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