Japanese Stocks Climb on Evergrande’s Enthusiasm. Where Next?

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The formation of NIKKEI225 shares implies the development of an uptrend that moves within the bullish green channel. There is also a possibility that since March of this year, the market has been moving in a flat, which is formed within the horizontal yellow channel.

Currently, the price is in the lower green area, as well as near the upper yellow line. Thus, there are two possible scenarios.

In the first variant, a downward movement of the price is expected in the direction of the support level of 27842, which is located on the lower line of the green channel. With a successful break of this price level, the bears will open the way to the lower green wall and the support level of 23279.

In the second variant, market participants expect an upward trend. Perhaps the bulls will push the market to the upper yellow line, and in case of a break of the resistance level of 30825, which is located on it, we should expect more rapid growth to the next important resistance level of 34791, which is located on the upper green line.

If the market moves according to the first option, then it is worth considering opening sales deals. When confirming a bullish movement, it is recommended to consider opening long positions.

Let’s continue our observation of these stocks in the following reviews.

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