The Japan’s 225 stock index (cash) has been showing a positive momentum for the second consecutive day, reaching a three-week high of 38,421. This indicates a reversal of more than half of the previous freefall seen in July and August. The technical indicators suggest that there is still bullish potential in the market, with the RSI making upward progress and the MACD remaining positively charged.
Despite the positive signals, there are challenges that lie ahead for the JP 225 index. The 50-day simple moving average at 38,600 and the 39,500-39,950 area could act as resistance levels, potentially delaying any further advances towards the 41,147-41,500 zone. If the price manages to break through these levels, there is still uncertainty about whether it will be able to surpass the 42,950 mark.
On the other hand, there are also downside risks to consider. If the price drops below the 200-day SMA at 37,435, the focus will shift to the 20-day SMA at 36,600. A breach of the 35,300 region could lead to a retest of the 33,585-33,130 floor. This indicates that while there is a possibility of continued recovery in the near future, the downside risks cannot be ignored.
The JP 225 index is showing signs of a recovery trend, with positive momentum and technical indicators favoring further upside potential. However, there are challenges and downside risks that need to be taken into consideration. Whether the index will be able to surpass key resistance levels and maintain its recovery trend remains uncertain. Traders and investors in the Japanese market will need to closely monitor the price action and key technical levels to determine the future direction of the JP 225 index.