The futures of the Japanese index Nikkei 225 (NKD) it has been traded mostly bearish. During this month, NKD eases 4.98%. In this post, we’ll review the short-term Elliott Wave structure and what to expect from this index for the coming days.
The second internal leg
The NKD daily chart shows the second leg in progress of a corrective sequence. The A-B-C corrective structure started on May 03, when the price found sellers at 22,505 pts.
After the first decline, the second leg dropped and met the minimum requirement when dropped to the 20,080 pts zone. As long as the price doesn’t soar above 20,798 level, we expect a new decline to 19,606, where the equality legs rule will be complete.
If Nikkei plunges under the Christmas low (18,960 pts), the next bearish target is at 18,242. On the other hand, if Nikkei closes the day as an engulfing candle, we could have signals that correction has ended and we can expect more upsides.