Technical Analysis – JP225 cash index could see a sizeable move soon
The Average Directional Movement Index (ADX) currently appears to follow the SMA convergence signal as it is indeed signaling a muted and weakening bearish move. This could be seen as the basis for a new trend developing soon. With the RSI near its midpoint, the burden falls again on the stochastic oscillator to guide the market. It is currently hovering above its oversold territory and preparing to test the resistance set by its moving average (MA). A failure to break above its MA could be seen as a bearish signal.
If the bulls maintain the market reins, their first target would be at the trifecta of the SMAs at the 27,335-27,353 area. Even higher, the 38.2% Fibonacci retracement at 27,423 could prove tougher to clear, just below the February 6 high of 27,852.
Should the bears regain market control, they would face the 50% Fibonacci retracement level of 26,866. Then, the path would be clear until at the 61.8% Fibonacci retracement at 26,308. Even lower, the busier 25,791 area of the July 1, 2022 low could be targeted next.
To sum up, the JP225 bulls are trying to stage a comeback, but all eyes are on the SMAs convergence.Related Assets
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