[Japanese Stocks] A week to watch whether it can recover and maintain above the 200-day Moving Average | Hiroyuki Fukunaga's Technical Analysis Course You Can Ask Now | Manekuri Media for Investment Information and Financial Assistance from Monex Securities

The 5-day Moving Average has changed to an upward trend; attention is on whether the rebound will continue.

In the previous column, it was explained that by comparing the stock prices of the Nikkei average with the stock prices from n days prior using the “three moving averages,” if it can maintain around 37,500 yen for the time being, it is expected that the 5-day Moving Average will change to an upward trend and provide support. Along with this, the rise of the 25-day Moving Average is expected to continue, and it seems that there is a possibility of once again surpassing and maintaining 38,000 yen. In fact, there was a moment when it fell below the 37,500 yen level, but it quickly recovered back to the 37,500 yen level, resulting in the 5-day Moving Average changing to an upward trend.

Moreover, the upward-changing 5-day Moving Average has become a support, and as of May 27, it has closed with three consecutive rises in trading. Given this situation, if it can maintain above the upward-changing 5-day Moving Average, it seems likely to recover and maintain the 38,000 yen level.

On May 27, it closed close to the gently declining 200-day Moving Average, and if it maintains above the 5-day Moving Average, it is expected that it will also surpass the 200-day Moving Average. At the same time, it seems possible to maintain above the intraday high set on May 13.

[Chart] Nikkei Average Stock Price (Daily) Source: Created by Invest Trust from i-chart *The periods for the Moving Avarage are set to 5 days (blue line), 25 days (red line), and 200 days (gray line). ※The trading volume is in the prime market *The momentum period is set to 10 days (blue line), and the 3-day Moving Avarage of the momentum (red line) is also displayed.

Attention is needed as the momentum continues to decline.

In this context, looking at the momentum that indicates the strength of rising and falling trends, both the momentum and its Moving Avarage, which is the signal, are fluctuating just below the 0 line, which is the dividing line for judging the strength of rising and falling trends. Therefore, whether the decline of the two lines continues is a point of focus.

If the decline of the two lines continues, even if there are moments above the 200-day Moving Average, it is likely that it cannot be maintained and will be pushed back down, or it may fall below the upward 5-day Moving Averages. Therefore, caution is necessary regarding high entry prices and sudden drops.

Moreover, if it reverses downward and falls below the 5-day Moving Average, it is possible that it could drop to or below the approaching upward 25-day Moving Average. Therefore, investors holding buy positions need to be cautious of potential losses or their expansion.

On the other hand, if the momentum remains limited even as it declines, or if it changes direction and rises, there is a possibility that the upward momentum will strengthen, surpassing the 200-day Moving Average and also exceeding the high of May 13. Therefore, it is important to pay attention to the direction and level of momentum to assist in trading decisions.