Nikkei 225 index for December delivery collapsed in Asia on Thursday after initially rallying to fresh multi-year high at 23420.
Sharp fall spiked to 22520 low, denting initial support at 22618 (daily Tenkan-sen) but subsequent bounce made probes below 22618 short-lived for now.
The index remains in steep uptrend in past two months which requires correction. Overextended daily studies generated initial signal, with slow stochastic already reversed from overbought zone while daily RSI is turning south, deep in the overbought territory.
Close below pivotal supports at 22618 (Tenkan-sen) and 22413 (10SMA) is needed to generate stronger bearish signal for extension towards 22396 (Fibo 23.6% of 19080/23420 ascend), with further easing to challenge rising 4-hr cloud (spanned between 223025 and 22088).
Initial resistance lies at 22858 (broken hourly cloud top), followed by converged hourly Tenkan-sen / Kijun-sen (22970) and 23000 zone where extended upticks should be capped to keep in play freshly established near-term bears.
Res: 22858, 22970, 23000, 23076
Sup: 22708, 22680, 22618, 22520
