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Nikkei 225: Potential higher low

Since the beginning of the year the index loss more than 15.5% and last week fell more than 2.0% plus in April the index changed from a recovery to a bearish phase.

Last week the index initially fell but found enough buying pressure to trim some of its losses however closed in the middle of the weekly range although managed to close below the previous week low, suggesting a weak bearish momentum.

The Stochastic is showing a bearish momentum and is below the 50 mid line.

Expecting a downward move to a weekly support at 14,510 on a bounce from a weekly resistance at 16,105 (scenario 1) or a break above the weekly resistance at 17,450 could push the index upward to the next weekly resistance at 17,450 (scenario 2).