May unload the Nikkei soon...

On 18th August 2006, the Nikkei 225 gained another 85.14 points or in percentage 0.53%. In the US markets, we saw the Dow Jones and the Nasdaq trading to a downside but shortly regained its footing placing themselves into positive territory.
The Japanese markets are opening in hours to come and here's a quick recap on the holdings that are currently in our portfolio basket. Certainly, there are signs showing that this index may top and may correct in the next few days. Based on the fact that the Nikkei is currently much at a overbought situation, candlesticks formations suggest that the index is very close to exhaustion forming a record of 7 consecutive white candles (in 1 year chart), we propose that it will be advisable to take profits at this level, and stay on the sidelines. Furthermore, upside potential is nearly stretched, and it may be too much of a risk to hang on as its warrants tend to retrace to a greater extent when Nikkei corrects than when it goes up.
However, if conditions are pleasant enough to render us into this counter again or put us on hold, it will be on how bullish is then the current investment sentiment, oil price, and the standpoint for the federal reserve rate hikes. The probability of putting us on hold to this counter is quite minimal as of now.

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