From around the beginning of December, Nikkei 225 has been forming higher lows, while balancing above a short-term upside support line drawn from the low of December 8th. Although this is an indication that the index may continue moving higher, so far it has been struggling to overcome the 26965 barrier, marked by the current highest point of December. For now, we will stay somewhat positive, but we will get a bit more bullish if that barriers surrenders.
A push higher, from the current level, may bring Nikkei to the above-discussed 26965 area, which if continues to provide resistance, might halt the uprise for a while. The price could even retrace back down a bit. However, if Nikkei 225 continues to float above the aforementioned upside line, the bulls might take charge again. If this time they are able to raise the index above the 26965 zone, this will confirm a forthcoming higher high, potentially sending the price to the next resistance level, at 27251. That level is marked near the lowest point of April 1990 and near the highest point of 1991.
The RSI and the MACD are currently in bullish territories. The RSI is above 50 and points higher. The MACD is currently flat, however sits above zero, but remains below its trigger line. The RSI supports the idea of seeing a move towards some higher areas, but the MACD keeps us in the cautiously bullish area, for now.
Alternatively, if the aforementioned upside line breaks and the price falls below the 26674 hurdle, marked by the low of December 17th, that may change the direction of the current trend and send the index lower. Nikkei 225 could then slide to the low of December 11th, at 26438, where it might stall for a bit. That said, if the sellers are still feeling comfortable and they are able to break below the 26438 area, the next possible target may be at 26315, or at 26175, which is the low of November 25th.
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