Decline to 19054 completed wave ((X)), and the Index has since resumed the rally in wave W in the form of a double correction ((w))-((x))-((y)) where wave ((w)) ended at 19865 and wave ((x)) ended at 19495. In our previous Nikkei 225 Chart of the Day posted at 5.20.2015, we said wave ((y)) is in progress towards 20314 – 20507, and some profit taking should be seen from 20314 – 20507 area and the Index to pullback 3 waves lower in wave X to correct the rally from 19054.
Since our last update, current preferred Elliottwave view suggests wave ((y)) of W has ended at 20350, and wave X pullback is in progress towards the ideal target of 19561 – 19714 (50 – 61.8 back). Wave X pullback is unfolding in the form of a double correction ((w))-((x))-((y)) where wave ((w)) is expected to complete at 19996 – 20107, then it should bounce in wave ((x)) before turning lower to resume wave X pullback towards 19561 – 19714. We do not like selling the proposed wave X pullback. As far as 19054 pivot holds in wave X pullback, expect buyers to come for 3 waves higher at minimum to correct the decline from 20350 per Elliott Wave hedging technique.
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