I have been trying to catch the top in NIKKEI for the last few months. Although at first we managed to be profitable with the decline of July- August from 20k to 19300, this time around I did not expect a higher high, but the technical indications we get tell me that in the longer-term this trade will be much more profitable, despite being under water now. NIKKEI not only has a 3 drive pattern (triple divergence in the RSI) in the daily chart, it has one also in the weekly chart. Yest it can move higher towards 21k but bulls need to be very cautious.
In the daily chart price has broken down below the upward sloping wedge pattern and is now back testing it by hitting the pattern below it. The last three highs in NIKKEI are part of the bigger third diverging top in the weekly chart.
I’m short in NIKKEI expecting a sharp sell off. My timing was not great this time but my time horizon is not near either. So my tolerance with this position is big.
Thank you for taking the time to catch up with my thinking.