Short Term Elliott Wave View in Nikkei suggests the bounce to 21805 ended wave (2). The Index has resumed lower and ended wave (3) at 19900. The internal of wave 3 unfolded as a 5 waves impulse Elliott Wave structure. Down from 21805, wave 1 ended at 21245 and rally to wave 2 ended at 21570. Index then continues the decline in wave 3 at 20485, wave 4 ended at 20690 and wave 5 of (3) ended at 19900. Further subdivision of wave 1 and wave 3 is also in the form of an impulse structure of lesser degree and can be seen at the chart below.
Near term, expect Index to rally higher within wave (4) as a zigzag Elliott Wave structure. Up from 19900, wave A ended at 20650 and wave B ended at 20220. While above there, Index has scope to extend higher towards 20977 – 21447 area to end wave C of (4) before the decline resumes. We don’t like buying the Index. As far as pivot at 21805 high stays intact, expect Index to extend lower from above area or pullback in 3 waves at least. Potential target to the downside is 19085 – 19607 area which is the 100%-123.6% extension from May 2019 high.
NIKKEI 1 Hour Elliott Wave Chart