GLOBAL MARKETS SECTION

No wonder the Japanese Nikkei has attracted some selling over the last few days. It's just hit a massive level of resistance, anywhere from 13,100 to 14,100 dating back to the lows of 1992, 1995, 1998.

Previous Support = Now Resistance

One of the most profitable and simplest forms of charting is to use previous highs and lows and reference points. There's a long standing and time-proved phrase -

'What was once support is now resistance' and vice-versa.

Japan has had a big move over the last couple of years with obviously hardly anyone backing it in the media. Until of course the last 6 months when over 75% of the move had already happened. It's hard now to find anyone that doesn't think that Japan is one of the best places to invest.

Well, this may well be the case but just bear in mind that the smart money is most probably taking some profits at these levels and the odds don't favour further prices increases for the time being.

The broad band of resistance (13,100-14,100) will most probably mean that at least for the next several months the market will meander around this level without actually going anywhere.

The only provision to this is if we get a thrusting move up to and above 14,100. If that's the case then take note and we'll certainly report the event.

Useful Links

• Futuresource charts
• Trade the Nikkei index with tax-free profits using Spread Bets