Japan’s 225 stock index barely surpassed the 2019 support-turned-resistance level of 19,239 as the blue Kijun-sen line stood tall. Nevertheless, it managed to close slightly above the 20-day simple moving average (SMA).
The RSI and the Stochastics reflect that downside risks remain in place as the former seems to be losing momentum before even touching its 50 neutral level, while the latter is ready to post a bearish cross above its 80 overbought mark.
Still, if the index holds above the 20-day SMA, the bulls could retry to overcome the blue Kijun-sen line currently at 19,484 and then run towards the 20,100 barrier. Higher, the door could open for the 50-day SMA at 21,480 if the 20,800 mark proves a weak obstacle.
In the event the bears dominate, pushing the price back below the 20-day SMA, Thursday’s support level of 18,384 could be re-tested. Beneath that, the decline could take a breather near the red Tenkan-sen at 17,547, where any violation could trigger a steeper downfall towards 16,200.
Meanwhile in the medium-term picture, the index maintains a bearish profile and only a higher high above 22,486 could officially upgrade the outlook to neutral.
In brief, Japan’s 225 stock index is currently looking for support near the 20-day SMA after climbing above it. If the line fails to curb downside corrections, the pair could resume its negative momentum.
