Technical Analysis – JP225 cash index at key support area
The momentum indicators appear to be sending a mildly bullish signal, but cracks are forming. The RSI is dipping towards 50 and the Average Directional Movement Index (ADX) signals the presence of a strong bullish trend in the market. Similarly, the stochastic oscillator is at the overbought (OB) territory, making a new higher high. However, this high is not reflected in the JP225 price action thus increasing the chances for a bearish divergence. If we add the convergence of the SMAs, then there is an increasing probability for a sizeable move in the JP225 index.
If the bulls manage to retake the market reins and clear the 38.2% Fibonacci retracement level of the March 8 – August 17 uptrend of 27,423, their first target would be the 23.6% Fibonacci retracement of 28,113. Higher, the twin highs of 28,394 and 28,682 could prove tougher to clear.
Should the bears manage to break the trifecta of SMAs, they could face strong support at the 50% and 61.8% Fibonacci retracement at 26,866 and 26,308 respectively. Even lower, the busier 25,791-25,972 area could be targeted.To sum up, the JP225 cash index is in consolidation mode after a strong move higher. A break below the 27,085-27,226 area could prove decisive for short-term momentum.
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.