Nikkei Engulfing Bar off Key Level | June 5th
Nikkei 225 – Bearish Engulfing Bar, Now Close to Entering Bear Market Territory
On May 26th in my market commentary, I discussed how if the 14000 level collapses, then 13615 and 12700 will come under pressure. Looking at the chart below, we can see how this 13615/60 level was a key level, that once broken, became resistance two times. Today, the index formed a large bearish engulfing bar, dropping over 850 pts on the day just shy of the 12700 aforementioned level.
It should be noted the last three days have formed a wide range, which may play out for another day or two ahead of the NFP report on Friday. If price climbs back up to the 13600/660 level, it should act as resistance, so I will look for sell signals here to rejoin the downtrend. After the 12700/645 support area, the next downside levels where bulls may come in (or profit taking occurs), will be 12000 and 11775, so quite a lot of downside available.
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