The Japan 225 index has risen by around 600 points after hitting a one-and-a-half-month low of 21,914 last Tuesday.
The RSI is on the rise, having entered bullish territory above 50; this is painting a positive short-term picture. The bias in the very short-term is also bullish as indicated by the stochastics oscillator: the %K line has moved above the slow %D one, with both lines continuing to head higher.
Additional gains may meet resistance around the 61.8% Fibonacci retracement level of the January 23 to March 23 downleg at 22,695, with stronger bullish movement turning the attention to May 21’s four-month high of 23,045; the region around this also includes the 23,000 round figure that may hold psychological significance.
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On the downside, support could come around the 50% Fibonacci mark at 22,239. The 100- and 50-day moving average lines at 22,186 and 22,157 respectively, as well as last week’s one-and-a-half-month low of 21,914 lie not far below, while sharper losses would shift the focus to the 38.2% Fibonacci level at 21,775.
In terms of the medium-term picture, it is looking mostly bullish, with price action moving above both the 50- and 100-day MA lines recently. However, the positive outlook remains fragile with trading still not far above the two MAs; a drop towards and below the two MAs – notice that they roughly coincide at the moment – would paint a more neutral medium-term picture.
Overall, both the short- and medium-term outlooks are looking bullish, with the latter only marginally so at the moment.