Technical Analysis – JP225 cash index recent correction might have legs
June 29, 2023 1:27 pm
The JP225 cash index is trading lower today as the bulls are trying to overcome the first decent correction since the current uptrend started on March 15, 2023, and are mentally preparing for another all-time high. However, the overall upward movement remains overstretched and hence corrections might take place more often and be more forceful than the bulls would prefer.
The momentum indicators are probably supporting the increasing bearish pressure. The Average Directional Movement Index (ADX) is still moving lower, signaling that the once-dominant bullish trend might have run its course. More importantly, the stochastic oscillator broke below its overbought territory and continues its downwards move, albeit at a less aggressive pace during the past three sessions.
Should the stochastic’s drop pick up pace, the bears would be keen on breaking the June 27, 2023 low at 32,300. They could then have a look at the busier 30,711-31,764 area that is populated by the 23.6% Fibonacci retracement level of the March 8, 2022 – June 16, 2023 uptrend, the 50-day simple moving average (SMA) and the June 27, 2023 low respectively.
On the flip side, if the bulls decide to ignore the mixed technical signs, they could attempt to retest the all-time high of 34,006. If successful, they would have the chance to record higher highs with 35,000 being the first step.
To sum up, the JP225 index bulls are preparing for a higher high hoping that the correction was a one-off event. However, the momentum indicators do not share their optimism.
The JP225 cash index is trading lower today as the bulls are trying to overcome the first decent correction since the current uptrend started on March 15, 2023, and are mentally preparing for another all-time high. However, the overall upward movement remains overstretched and hence corrections might take place more often and be more forceful than the bulls would prefer.
The momentum indicators are probably supporting the increasing bearish pressure. The Average Directional Movement Index (ADX) is still moving lower, signaling that the once-dominant bullish trend might have run its course. More importantly, the stochastic oscillator broke below its overbought territory and continues its downwards move, albeit at a less aggressive pace during the past three sessions.
Should the stochastic’s drop pick up pace, the bears would be keen on breaking the June 27, 2023 low at 32,300. They could then have a look at the busier 30,711-31,764 area that is populated by the 23.6% Fibonacci retracement level of the March 8, 2022 – June 16, 2023 uptrend, the 50-day simple moving average (SMA) and the June 27, 2023 low respectively.
On the flip side, if the bulls decide to ignore the mixed technical signs, they could attempt to retest the all-time high of 34,006. If successful, they would have the chance to record higher highs with 35,000 being the first step.
To sum up, the JP225 index bulls are preparing for a higher high hoping that the correction was a one-off event. However, the momentum indicators do not share their optimism.
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