Japan 225 (NIKKEI 225) Keeps Holding Promise

Following last week’s performance, price action in the Japan 225 index has shown significant progress. However, there are indications of a potential upside breakout. This, however, will depend on how the stock market performs in the days ahead. Let’s examine this more closely below.

Key Levels

Resistance: 40,000, 42,500, 45,000

Support: 39,000, 36,500, 34,000

NIKKEI Perches on a Key Baseline

The Japan 225 has largely been consolidating for about two weeks. The Bollinger Bands (BB) indicator is seen contracting, signaling reduced volatility. The most recent price candle has landed on the middle band of the BB indicator.

This candle is bearish but has not broken through the previously tested support level. Meanwhile, the Smoothed Rate of Change (SROC) indicator line continues to move sideways above the equilibrium level. Therefore, the market appears to be well-positioned for a potential upward rebound.

Japan 225 Stays Around Key Technical Levels

On the NIKKEI 4-hour chart, price action has slipped slightly below the middle band of the BB indicator. The latest candle is solid green with a small body, reflecting some buying pressure. Similar to the daily chart, the SROC indicator line here continues a sideways movement above the equilibrium line.

As a result, this suggests that price action may witness a notable upward rebound from current levels. However, this outlook is contingent on upcoming economic news from Japan and overall market sentiment. Consequently, traders may consider targeting a move back above the 40,000 price level.

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