Technical Analysis – JP 225 index unable to decisively close above 50.0% Fibonacci

Anthony Charalambous, XM Investment Research Desk

JP 225 stock index (Cash) appears mostly flat in the very near-term as it edges sideways into the Ichimoku cloud, capped by the 50-day simple moving average (SMA) residing at the 19,779 border, that being the 50.0% Fibonacci retracement of the down leg from 24,162 to 15,384. Extra neutral signals are reflected in the flattened Ichimoku lines, despite their bullish tone.

The short-term oscillators further exhibit a picture of evaporated directional momentum. The MACD is above its red trigger line but flat at the zero mark, while the RSI improves marginally from the 50 level. That said tilting the scale to the downside are the declining 50- and 100-day SMAs and the fresh bearish crossover of the 200-day SMA by the 100-day one.

If buying interest increases, the question remains whether the bulls could conquer the immediate resistance coming from the 50.0% Fibo of 19,779 coupled with the 50-day SMA. Managing to step over this barrier, the 20,190 and 20,460 hurdles may challenge the climb ahead of the 61.8% Fibo of 20,813. Propelling the price further, could shift the attention to the region from the 21,725 peak till the 21,905 inside swing low.

Otherwise, downside corrections could face initial support from the 18,847 level with more weakness driving the price towards the 18,154 obstacle. Dropping further, the 17,547 trough and 23.6% Fibo of 17,456 beneath could halt a plunge in the index for the 16,062 mark.

All in all, the very short-term paints a neutral picture for now with a break above 19,779 or below 18,847 needed to reveal a clearer direction for the short-term outlook.