Elliott Wave View: Nikkei Incomplete Bullish Sequence Favors More Upside

Nikkei incomplete sequence from December 26, 2018 low and August 26, 2019 low, favoring further upside. A 100% Fibonacci extension from August 26, 2019 low comes at 23360 while 100% extension from December 26, 2018 low comes at 23380. Until the Index reaches this area, short term dips likely remain supported in 3, 7, or 11 swing. On the chart below, we can see the pullback to 21070 ended wave ((2)). The Index resumes higher in wave ((3)) with the internal subdivision unfolding a 5 waves impulse Elliott Wave structure.

Up from 21070, wave 1 ended at 21650 and wave 2 pullback ended at 21325. Index then resumed higher in wave 3 towards 22820, and wave 4 pullback ended at 22495. Index should soon complete wave 5 of (1). Afterwards, it should pullback in wave (2) to correct the cycle from October 3 low before the rally resumes. We don’t like selling the Index and expect buyers to appear in the sequence of 3, 7, or 11 swing as far as pivot at 21070 low stays intact.

Nikkei 1 Hour Elliott Wave Chart