FxWirePro Call Review: Maintain short positions in Nikkei225; interim targets added

Back in February this year, in an article named, “FxWirePro: Sell Nikkei 225 1:3 risk reward ratio”, available at https://www.econotimes.com/FxWirePro-Sell-Nikkei-225-13-risk-reward-ratio-1158298 , we suggested, “The Japanese benchmark stock index Nikkei225 reached several of our bull side targets like the ‘another 12 percent rise call in October 2017’; here is the link, http://www.fxwirepro.com/fxwire/popup/newsPopup?id=748952 however, our calculations suggest that the tide might finally be changing direction. The global stock market selloff that rattled investors’ nerves just a few weeks back exposed how years of complacency (since 2012 in case of Nikkei) could lead to violent stock market moves within days or weeks.

We believe that the selloff might not be over and Nikkei could go a long way down.”

We also highlighted the reason behind the bearish outlook,

• The rates are moving higher, especially in the United States. A weaker dollar is likely to add to it. A higher risk-free rate in treasuries means higher cost of capital for stocks and higher discounting rate for equity analysts.
• The recent reports published by the U.S. Commerce Department with regard to Aluminum and Steel imports show just how serious the Trump administration is in curbing the trade deficit of the United States. Check out the reports at Commerce.gov
• In addition to that, it is quite clear that the course of monetary policy has changed with more and more central banks signaling a shift.

Since then, the second point has further intensified as president Trump announced a trade action under section 301 which targets Chinese goods worth $60 billion which will become live after a 30-day period and China retaliated announcing potential tariffs on $3 billion worth of imports.

For the trade, we suggested, “Our calculations suggest the Nikkei, which is currently trading at 21828 (JPN225) is likely to decline to as low as 15300 area. We recommend a stop loss near 24200.”

As global stocks selloff fathers pace, JPN225 (CFD of Nikkei225) declined further and currently trading at 20750 area. We would like to urge our readers to maintain short positions and in this article, we would like to add the following interim targets.
 

Target 1 - 20030

Target 2 - 19570

Target 3 - 17450

Target 4 - 16080

Expect temporary bounce backs from the above-mentioned interim a targets. Readers can go for partial profit bookings at their own discretion.