Nikkei has been trading inside a sideways contracting triangle since past June. The decline from 15942 to 12415 has been followed by an overlapping price pattern that never exceeded those two levels. Prices have been trading within the price range of 15000 and a series of higher lows from 12415 to the last one at 14026. The sideways price pattern will soon come to an end as prices hit and test the triangle boundaries that are closing in on the index. Soon we will see a price break out and traders should take advantage of the trend that will dominate once the break out occurs.
In the above chart you can see the targets of the move we expect NIKKEI is going make whether it breaks the upper or lower boundaries of the triangle. If prices break below 14026 we will have a downward break out. Confirmation will come if prices break below 13800. Target for the bearish scenario is 11244. If prices break above 14800 we will have a bullish sign. Confirmation of the upward break out will be given once prices break above 15000. First bullish target will be 16560 and second target is 18131.
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