【This Week’s Nikkei Average Forecast】 Is the pullback a buying opportunity, or the start of a downturn? Strategy for this week considering resistance/support turn
The Nikkei average rose to the highest level in history, but over the weekend it fell by about 4%. Profit-taking selling in AI and semiconductor-related stocks, which had been bought heavily in a short period, spread, and the market cooled down once.
So, what kind of developments can be expected this week?
Personally, I am paying more attention to where the resistance-support reversal will occur than to which direction it will move.
Scenario ① (Main)
Recover to 70,000 and form a pullback while rising
This is the scenario I consider most likely.
The rapid drop this time has somewhat alleviated the short-term overheating.
On the other hand, it is hard to believe that the inflow of funds into AI-related stocks leading the Japanese market has completely ended, so a pullback buying environment is likely to occur.
Targeted resistance-support reversal
For example,
- Break above 70,000
- Pull back once toward around 70,000
- 70,000 becomes support
- Reversal signal appears
If it takes this form, it will be a very clean resistance-support reversal.
“Chasing the breakout” is not the aim; rather, waiting for the pullback after the breakout.
This is likely to be the scenario with the highest expected value.
Scenario②
Stoppage near 69,000 and rebound
If profit-taking selling continues, there is a possibility of a pullback to around 69,000.
However, if buying pressure comes in at this price range,
- Stops the decline
- Lowers highs and raises lows
- A reversal signal appears
then
it becomes a very favorable setup for buying on pullbacks.
Rather than forcing purchases during the fall,
the key is to
confirm that the downtrend has stopped.
Scenario③
Clearly break below 69,000
If it breaks below 69,000,
there is a possibility of a short-term adjustment phase.
In this case,
instead of a buying] stance,
switch to a selling-on-rebound stance.
For example,
- Break below 69,000
- Briefly return to around 69,000
- Function as resistance
- Sell reversal signal
If such resistance-support reversals appear, selling becomes a consideration in the scenario.
In other words,
the important thing is not the price itself, but the moment when the role reverses.
Events to watch this week
This week,
- US employment data
- Japan’sBank of Japantankan (short-term business outlook)
- PMIs for Japan and the US manufacturing sectors
and other important events continue.
These could trigger increased volatility, and an important price level could see resistance-support reversals occur.
How I would target it
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