Technical Analysis – JP225 cash index correction could persist if the next trough is below 31,767
July 20, 2023 8:30 am
The JP225 cash index is trading lower today as the bulls are finding it difficult to regain control of the market. A series of lower highs and lower lows is already in place with the bears aiming for the next trough to occur below the latest low of 31,767, which coincides with a key support level.
While the medium-term trend remains bullish, the current short-term downleg has managed to reset the momentum indicators. The Average Directional Movement Index (ADX) is edging lower, below its 25-threshold, signaling that the once-dominant bullish trend has probably ended, and the RSI is hovering around its midpoint. Similarly, the stochastic oscillator is trying to find its direction.
Should the bears remain committed in recuperating part of their significant losses, they would try to overcome the 32,187-32,300 range populated by the June 27, 2023 low and the 50-day simple moving average (SMA). However, the bulls’ real target appears to be the 23.6% Fibonacci retracement level of the March 8, 2022 – June 16, 2023 uptrend at 31,764, and the March 15, 2023 upward sloping trendline.
On the other hand, the bulls are keen on defending the 32,187-32,300 area and setting the foundation for another upleg. The path appears clear until the June 16, 2023 high at 34,006, opening the door for a new all-time high.
To sum up, the JP225 index bears could finally crack a smile as the current correction persists. However, the bulls are probably treating the latest move as a necessary reaction following the aggressive rally since the March 15, 2023 low.
The JP225 cash index is trading lower today as the bulls are finding it difficult to regain control of the market. A series of lower highs and lower lows is already in place with the bears aiming for the next trough to occur below the latest low of 31,767, which coincides with a key support level.
While the medium-term trend remains bullish, the current short-term downleg has managed to reset the momentum indicators. The Average Directional Movement Index (ADX) is edging lower, below its 25-threshold, signaling that the once-dominant bullish trend has probably ended, and the RSI is hovering around its midpoint. Similarly, the stochastic oscillator is trying to find its direction.
Should the bears remain committed in recuperating part of their significant losses, they would try to overcome the 32,187-32,300 range populated by the June 27, 2023 low and the 50-day simple moving average (SMA). However, the bulls’ real target appears to be the 23.6% Fibonacci retracement level of the March 8, 2022 – June 16, 2023 uptrend at 31,764, and the March 15, 2023 upward sloping trendline.
On the other hand, the bulls are keen on defending the 32,187-32,300 area and setting the foundation for another upleg. The path appears clear until the June 16, 2023 high at 34,006, opening the door for a new all-time high.
To sum up, the JP225 index bears could finally crack a smile as the current correction persists. However, the bulls are probably treating the latest move as a necessary reaction following the aggressive rally since the March 15, 2023 low.
Related Posts: