The Nikkei 225 index contains 225 members, and on Thursday, 3 March 2016, 178 members were up and 41 members were down. The star performers of the day include companies like Sumitomo Mitsui financial group Inc (+8.55%), Mitsui OSK Lines Ltd (+8.44%), TDK Corporation (+7.66%) and Shinsei Bank Ltd (+7.14%). The weaker performers on the day included central Japan Railway Corporation (-2.13%), COMSYS Holdings Corporation (-2.59%), and Sumitomo Osaka Cement Co Ltd (-2.41%). The performance of members changes dramatically from day-to-day, but it is important to get a sense of how companies are doing as that gives us an indication of the volatility of their share prices. Wild swings in daily share prices indicate volatility with the stock, and if read correctly could prove a lucrative opportunity for binary options traders.

Reading the Nikkei 225 index in March

Overall, the short-term outlook for the Nikkei 225 index is somewhat negative with occasional sparks of upward momentum. The index has finally managed to break through a resistance level during a falling trend. This is positive in that it indicates a slowdown in the rate of decline for the index. We are likely to see horizontal movement (sideways movement) of the index in March as stabilization measures come into effect. There are various support levels at around 16,000, with resistance points hovering around 17,900. The relative strength index indicates that there is plenty of bullish momentum in the Nikkei 225 over the short-term and we are likely to see price rises during the month of March.

Owing to the lag effect, the RSI chart will taper off before the Nikkei 225 weakens. As can be seen from the below graphic which represents the short-term performance of the Nikkei 225, there is reason for optimism in February as a mini-bullish trend has developed, although the horizontal movement is clearly evident. The Nikkei 225 index has a pivot point of 14,952.61 and it has been 14 days (as at March 3, 2016) that the index has moved in the opposite direction. This is an important gauge of short-term trading direction as a binary options trader.