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Technical Analysis – JP225 cash index bears show signs of life

  • JP225 cash index dips lower after strong upmove

  • Bulls still focused οn testing the June 16, 2023 high

  • Momentum indicators show some early signs of trend reversal

The JP225 cash index is trading lower again today as the bulls appear to be taking a breather from the recent strong rally. The JP225 is still around 10% higher than the end-of-October low of 30,380 and not far from the all-time high of 34,006.

In the meantime, the momentum indicators are probably showing some early signs of a possible trend reversal in the JP225 index. In more detail, the RSI has probably peaked, and it is edging lower, towards its midpoint. Interestingly, the stochastic oscillator has moved below its moving average and appears ready to cross below its overbought territory. Should this take place, it would be seen as a strong bearish signal. Only the Average Directional Movement Index (ADX) is trying to make a higher high and it is thus supporting the current uptrend.

Should the bulls remain confident, they would try to push JP 225 index back above the September 15, 2023 high at 33,649 level, and then plot their course towards the June 16, 2023 high at 34,006. If successful, they could then have the chance of recording a new all-time high.

On the other hand, the bears are keen on continuing the current correction. Their primary target appears to be the 32,125-32,280 area defined by the 50- and 100-day simple moving averages (SMAs). Even lower, the 23.6% Fibonacci retracement level of the March 8, 2022 – June 16, 2023 uptrend at 31,764 could prove easier to overcome than currently foreseen, with the next key support expected at the 30,376-30,923 region.

To sum up, the JP225 index bulls appear relaxed with today’s red candle but they will probably reevaluate their stance if the correction picks up speed.

For more details:

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