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The Nikkei as you can see broke out to the upside during the previous week, and in fact smashes through the top of the wedge that the market has been in for some time, if you are willing to look at the massive range from a few months back as a false breakout of sorts. We've been paying attention to this, and the fact that there's been an uptrend line is reason enough to think that this market continues higher now. The breaking of the ¥15,000 level courses significant from a psychological standpoint, and as a result we feel that this market will continue to go much higher.
Pullbacks will be buying opportunities of course, but you may have to find them on the daily chart. We believe that the ¥14,800 level will be the bottom of the support that should be forming now, and as a result will be looking for anything down to that level that looks like it's going to produce a buy signal in order to go long. Remember, the Bank of Japan is working with the Nikkei itself in order to keep the market afloat, so having said that we feel that this market will be bought every time it dips.
Even though we are choosing to ignore the massive spike to the ¥15,900 level, we do recognize that there could be a little bit of resistance up there. Because of this, we will have to be relatively steadfast in our conviction, but this is something that we believe and based upon months and months of bullishness. The Nikkei of course should continue to see another leg higher, and as a result we feel the ¥16,000 is all but ensured at this point.
As far as selling is concerned, we would have to break down below the ¥14,000 level in order to consider it, and that is something that seems very unlikely at this point in time. Because of this, we are looking at pullbacks as buying opportunities, unless of course we break the aforementioned level which would also break the uptrend line.