A long period of consolidation trapped the price between a range of ¥4400 and JPY ¥3250 for three years which would translate into incredibly frustration from investors at the lack of any proper direction.
However a resolution was found in the beginning of 2016 when the price wasn't able to hold long term support and broke to the downside playing into the hands of the sellers.
Observing the consolidatory movement it's easy to notice the distinct technical pattern of a Double Top that formed during this phase and would suggest a conclusive end to a definite trend, in this case the uptrend. The pattern also helps us identify potential levels where price can find support in lower areas of the chart.
Price has rebounded off the lows at ¥2450 whereafter it staged a good effort to make back lost ground but not without skepticism as it fast approaches a previous support line of ¥3250. It's assumed that this line will provide stiff resistance which has proven evident in the reversal of the price candle in close proximity to it.
The 50 day moving average is pointing down strongly indicating the strength lying with the sellers. Added to this is the bearish continuation divergence playing out on the Stochastic which makes it harder for the buyers to feel comfortable in believing the price will go higher from here.
Ultimate target for the Double Top would be at ¥2295 which seems likely to happen and given the levels where price is trading it could make a profitable medium term trade.
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