Japan’s 225 stock index has staged a 5% rise over the past two weeks to jump above the Ichimoku cloud and reach a nine-week high of 21,554 today. The MACD keeps stretching higher and above its red signal line, spreading hopes that there are more gains in store. The RSI is also in bullish territory (above 50) but seems to be losing steam, a sign that caution may soon return to the market.

If the rally continues, the 50% Fibonacci of 21,847 of the downleg from 24,472 to 19,239 could halt upside movements ahead of the 200-day moving average at 22,027. A significant step above the latter could reach the 61.8% Fibonacci of 22,479, while even higher a stronger resistance could be found near 23,000.

Moving south, the 38.2% Fibonacci of 21,243 could act as support as it did in previous sessions. Slightly lower the bears may find a wall near 20,960 before the 23.6% Fibonacci of 20,476 comes on the radar. If selling pressure strengthens even further, 20,180 could be the next level to watch.

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