HomeContributorsTechnical AnalysisJapan 225 Index Builds Base around 2-Month High; Rebounds on Long-Term Uptrend...

Japan 225 Index Builds Base around 2-Month High; Rebounds on Long-Term Uptrend Line

Japan 225 index has advanced considerably since roughly the end of March, hitting a two-month high of 22526 during Friday’s trading. Price action at the moment is taking place not far below this peak. In a longer-timeframe, the index has been developing in an uptrend since June 2016 and this week it surpassed the 20-week simple moving average.

In the near term, a fresh upside push is possible with prices looking to post a third straight session of gains today. The RSI indicator appears to be in the positive territory and is pointing upwards, while the moving averages of stochastic oscillator entered the overbought zone, suggesting further bullish outlook.

Should the positive momentum gain further traction though, fresh resistance could come at the 23536 resistance level. A break above this level could lead prices towards the 24191 strong barrier, identified on January 23.

To the downside, immediate support is likely to come from the 20- and 40-SMAs at 21871 and 21621 respectively. A breach of this level could push prices lower towards 20322, which coincides with the long-term ascending trend line.

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