A weaker yen and positive economic indicators have pushed Japan's Nikkei to one-month highs but with the index well below its 2013 peak charts indicate the market is poised to fall.
The Nikkei has developed a downtrend – trend line A which developed near the 16,232 high in December 2013 – and is testing support near 14,000.
This is a long-term trend reversal pattern that uses uptrend line B as resistance. Uptrend line B defined the uptrend starting in April 2013 and acted as support until January 2014. The Nikkei's fall below this trend line signaled a change in the uptrend, thus uptrend line B acted as resistance after January 2014, capping the index's rebound rise near 15,500.
The rebound and retreat pattern confirmed the location of downtrend line A. A breakout above downtrend line A would be bullish; however this appears to be a low probability event. Any breakout has resistance near 14,800.