Buying Bouncing Nikkei 225
The Nikkei 225 (J225), a major Japanese stock market gauge, appears to be significantly oversold. The benchmark has plummeted by 27.8% from its July high of 42,515 points, hitting a low of 30,705 points on August 5, the lowest since October 31, 2023. This rapid decline has been driven by panic sell-offs. Even if the downward trend continues in the mid-term, the benchmark is likely to experience at least a dead cat bounce.
Currently, the entry point seems appropriate as J225 has reached its trend support. My target range is 37,000-38,000 points, aligning with the average of the ascending channel and a horizontal support level, marking the starting point of the recent decline. A stop-loss could be set at 29,500 points.
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