Technical Analysis – JP225 index bounces off 200-SMA; short-term bias positive but weak
November 25, 2019 11:26 am
Japan’s 225 stock index failed to cross below the 200-period simple moving average (SMA) on Thursday on the four-hour chart and instead rallied back into the 23,000 area and closer to the upper surface of the Ichimoku cloud.
The RSI and the MACD also improved but have yet to expand comfortably in the bullish area, suggesting a weak positive bias for the short-term.
Buyers will be waiting for a decisive close above the 23,345 area and the surface of the Ichimoku cloud to increase exposure in the market. Should the index overcome the 23,500 barrier too, the door would open for the 13-month high of 23,646. Higher, a tougher resistance could emerge around the 24,000 number.
In case of a downside reversal, the 23,166-23,000 zone encapsulated by the 38.2% and 50% Fibonacci retracement levels of the upleg from 22,535 to 23,646 could halt the bears. Surpassing this region, the price may retest the 200-period SMA which currently touches the 61.8% Fibonacci of 22,880, a break of which could push support down to 22,677.
Meanwhile in the bigger picture, the market continues to hold an upward direction, though traders may turn cautious if the 50-period SMA continues to slow down towards the 200-period SMA.
Summarizing, the JP255 stock index is facing a positive but weak short-term bias, with traders waiting for a decisive rally above 23,345 to raise buying orders.
Japan’s 225 stock index failed to cross below the 200-period simple moving average (SMA) on Thursday on the four-hour chart and instead rallied back into the 23,000 area and closer to the upper surface of the Ichimoku cloud.
The RSI and the MACD also improved but have yet to expand comfortably in the bullish area, suggesting a weak positive bias for the short-term.
Buyers will be waiting for a decisive close above the 23,345 area and the surface of the Ichimoku cloud to increase exposure in the market. Should the index overcome the 23,500 barrier too, the door would open for the 13-month high of 23,646. Higher, a tougher resistance could emerge around the 24,000 number.
In case of a downside reversal, the 23,166-23,000 zone encapsulated by the 38.2% and 50% Fibonacci retracement levels of the upleg from 22,535 to 23,646 could halt the bears. Surpassing this region, the price may retest the 200-period SMA which currently touches the 61.8% Fibonacci of 22,880, a break of which could push support down to 22,677.
Meanwhile in the bigger picture, the market continues to hold an upward direction, though traders may turn cautious if the 50-period SMA continues to slow down towards the 200-period SMA.
Summarizing, the JP255 stock index is facing a positive but weak short-term bias, with traders waiting for a decisive rally above 23,345 to raise buying orders.
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