The Japan’s 225 stock index (cash) has been experiencing a soft positive momentum over the past few days. This uptrend is a reversal from the previous July-August freefall. The technical risk is currently skewed to the upside, indicating potential for further bullish movement in the near future.
Despite a downturn in the stochastic oscillator, the Relative Strength Index (RSI) is gradually moving upwards above the neutral mark of 50. Additionally, the Moving Average Convergence Divergence (MACD) is positively charged and aiming to cross above its zero line. These indicators, along with the price crossing above the middle Bollinger band, suggest a positive outlook for the index.
While the current trend is positive, there are potential challenges for the bulls in the near future. The 50-day simple moving average (SMA) at 38,600 and the 39,500-39,950 resistance zone could act as barriers to further upside movement. Breaking through these levels may be difficult and could delay the index’s advance towards the 41,147-41,500 resistance zone.
In the event of a bearish scenario, if the price drops below the 200-day SMA at 37,435, the focus may shift to the 20-day SMA at 36,600. A violation of the 35,300 region could push the price back into the 33,585-33,130 floor. These levels will be crucial to monitor in case of a downturn in the index’s trend.
The Japan’s 225 index is currently in a recovery trend, with potential for further upside movement in the near future. However, the index may face challenges in surpassing key resistance levels at 38,600-39,950. It will be interesting to see how the index performs in the coming days and whether it can maintain its positive momentum.