Short I opened a short position today based on the 4H chart and daily chart price set up.
My reasonings are as follows:
Japan225 has been in the range bound since Sept 2024. The price peaked at 42,420 area and sharply dropped to 30,480 on the 5th August 2024.
The price started to recovered to 39,150 area on the 30th August 2024. Since then, that level is working almost like a magnet and the price has been moving between 37,500 and 40,400 for months and months. However, MACD has been very slowly forming negative divergence. Therefore, although the price is consolidating sideways, my bias for trade is more towards shorting, and I could see a good set up unfolding this morning.
Currently the daily candle is sitting right on the major support/resistance line. But when you look at 4H chart and 1H chart, the price has formed the double top, dropped below the major support/resistance line, rested and is now moving to the downside.
All 4H momentum indicators are in agreement and moving to the downside. (They are still in the bull territory so the downside move might be limited).
1H MACD and RSI have formed clear negative divergence and now entering to the bear zone.
Entry - 39,191
Stop Loss - 39,508
Targtet 1 - 38,820 (the previous week's mid price)
Target 2- 38,550 (Fib 0.786 area in 1H chart)
The price action of Japan225 has been really choppy and messy, so it might not be an ideal asset to trade at the moment. I day trade Japan225 every morning using 1min chart, so I am familiar with this asset, but probably there are easier ones to trade.
I just wanted to share my trade idea.