Daily Indices Update: Japanese 225 (JP225) |
By, James A. Hyerczyk
A successful test of slightly below 8378.04 by the Japanese 225 (JP225) index CFD led to the formation of a short-term support base. This helped finish an emerging channel down chart pattern on the 60-minute chart. Autochartist is projecting a possible rally from this low level, but since the initial trend was down, traders should watch for a possible reversal signal rather than the usual continuation move.
The quality of the chart pattern is rated a slightly above average 6-bars. The initial trend rating, which measures the strength of the trend prior to the chart pattern’s formation is a below average 3-bars. The 7-bar uniformity rating means that the chart pattern contains a greater than average amount of equidistant tops and bottoms. The quality indicator looks for trading “spikes” and “gaps”. The solid 8-bar rating indicates the absence of such disruptive pattern phenomena.
The channel down chart pattern is a trending pattern. The wide parallel lines created by the JP225 make this current set-up ideal for swing traders or those that prefer to buy support and sell resistance. Based on the range of 8728.03 to 8378.03, bullish traders are likely anticipating a minimum 50% retracement of this range to 8553.03. This projection puts the market in a position to test the downtrending resistance line, making it a valid upside target. A breakout through this level will make this a completed chart pattern. If that occurs then Autochartist will formulate a new forecast price target.
About the author: Autochartist
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