Nikkei forecast for the week of November 30, 2015, Technical Analysis

The Nikkei went back and forth during the course of the week, essentially settling on no change. However, we have seen quite a bit of bullish pressure recently, with the most obvious candle being the one from last week which was a bearish engulfing candle. It’s only a matter time before we reach towards the ¥21,000 level again, and therefore we are bullish and buyers of the Nikkei as the upward momentum continues, and of course the Bank of Japan continues to offer stimulus when it comes to trying to deal value the Japanese yen. In fact, this is one of our favorite indices around the world right now, so we are most certainly bullish. However, we recognize that there is more than enough volatility that mean that we may get pullbacks, which we have to look at as value as the Japanese yen continues to soften against the US dollar.

One of the things that can offer quite a bit of volatility though is the fact that the EUR/JPY pair isn’t behaving the same. This of course is highly influenced by the European Union at the moment, which of course is full of its own problems. Ultimately though, the Bank of Japan has shown its proclivity in the past to do extraordinary measures when it comes to trying to devalue the currency. With this being the case, most traders will feel comfortable going with the Bank of Japan as opposed to trying to go against it.

The ¥21,000 level above is resistive, but it’s probably only a matter time before we break above there. We look at the ¥19,000 level below as supportive, as it was the site of the most recent breakout to the upside. We believe that the Nikkei is a nice longer-term “buy-and-hold” type of situation, and with that we are going to be very patient when it comes to buying this index. Unless you have the ability to deal with volatility, you should probably step aside, as this will be more or less a grinder to the upside.