To The Moon

Nikkei 225 has staged a sharp rebound, with price climbing from a low near 56,700 to currently trade around 61,40. The rally has pushed price back above the 59,300–60,400 zone, a level that had been closely watched on the way down.

① Daily Chart: Rebound Off Channel Support

Price found its floor at the lower boundary of the equidistant channel, coinciding with previous swing lows in this area. From there, the rebound has been swift — climbing roughly 8% off the recent low in a short span and reclaiming the 59,300–60,400 zone decisively.

The 20-day and 50-day moving averages are still turning down, and the 200-day moving average remains well above current price, so the broader moving average structure has not yet turned supportive. This keeps the recovery, for now, in the category of a sharp bounce rather than a confirmed trend change.

② The 59,300–60,400 Zone Is the Level to Watch

With price back above this zone, it becomes the key reference point for what follows:

● A hold above 59,300–60,400 on any pullback would support the case for further upside, with the moving average cluster of 20-day and 50-day near 63,200–65,000 as the next zone to watch.

● A slide back below 59,300 would call the rebound into question, bringing the equidistant channel floor back into focus as support, and 52,000 as the next support level further below should that channel break conclusively. 

Using Structured Warrants to Trade This Setup

A call warrant gains in value when Nikkei 225 rises; a put warrant gains when it falls.

Nikkei 225 on bullish view — If Price Steadies Above 60,400

A trader who believes price can steady above 60,400 and extend toward the moving average cluster (20-day and 50-day) as the next resistance zone, might consider a call warrant (such as NKY 66000MBeCW270312 ( $NKY 66000MBeCW270312(51KW.SI)$ ) — https://warrants.com.sg/tools/livematrix/51KW) as one way to express that view. The moving averages are still turning down, so a reaction at this cluster is worth watching.

Nikkei 225 on bearish view — If Price Falls Below 59,300

A trader who believes price could break below 59,300, or that a subsequent rebound gets rejected at the moving average resistance, turning price back down, might consider a put warrant (such as NKY 57000MBePW270312 ( $NKY 57000MBePW270312(VT9W.SI)$ ) — https://warrants.com.sg/tools/livematrix/VT9W) as one way to express that view. Should price break conclusively below the equidistant channel, the next support to watch is around 52,000.

Note: The featured warrants are quoted with tight spreads and high liquidity. They are also known as trending warrants.

Structured warrants are short-term trading instruments that magnify both gains and losses. Their value is affected by the underlying price, time to expiry, and implied volatility.

DISCLAIMER 

Information found in Binni Ong commentary is not an offer or solicitation to buy or sell, nor financial advice or recommendation for any investment product. She is providing education and training, and is not regulated by the Monetary Authority of Singapore or any financial regulatory body.

This commentary piece is sponsored by Macquarie Warrants Singapore. The views expressed by Binni Ong does not represent the views of Macquarie Group, nor its affiliates  

This advertisement has not been reviewed by the Monetary Authority of Singapore

Investment products including warrants are subject to significant investment risks, including the possible loss of the principal amount invested.  

Where past performance is referred to, it is not indicative of future performance. Examples quoted in this presentation are for illustration purposes only and do not represent any investment views or strategies. Advice should be sought from a financial adviser regarding the suitability of the investment product before you commit to invest in it.