Technical Analysis

Japan 225 Index Records 10-day Low; Remains Bullish in the Medium-term

Typography

The Japan 225 index has declined in the three previous trading days. In today's trading, it recorded a ten-day low of 19,980. Despite this fall in recent days, the index has been in large part moving sideways over the last number of weeks.

The stochastics are pointing to negative momentum over the short-term. Specifically, the %K line is edging further down into bearish territory, while it crossed below the slow %D line.

If the index rises, the area around the middle Bollinger line - a 20-day moving average (MA) line - at 20,100 could pose a barrier to the upside. Notice that the index briefly rose above this level in today's trading before retreating back below it. Further above, the area around the upper Bollinger band at 20,261 could provide additional resistance.

On the downside, the current level of the 50-day MA and lower Bollinger band, ranging from 19,948 to 19,935, might offer support. Below this territory, the focus would shift to the area around the one-month low of 19,840 for additional support.

Regarding the medium-term, it currently looks bullish mostly due to the significant advancing since mid-April and up to the second half of June - the index hit a twenty-three-month high of 20,322 on June 20. The price is above the 50- and 200-day MAs at the moment, while the 200-day MA is steeply upward sloping.

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