The Nikkei Stock Average is currently forming a symmetrical triangle, with attention focused on the direction of a break from the ¥65,800 lower boundary and ¥66,700 upper boundary at the end of September. The apex is expected to form in early October, shifting the focus to whether the breakout will be to the downside or upside.
The Nikkei Stock Average is currently forming a symmetrical triangle, with the lower boundary connecting the lows of 31 March and 29 July, and the upper resistance line connecting the highs of 22 June and 14 August. The key points to watch are whether the index breaks below this triangle's lower support line, breaks above its upper resistance line, or remains within the range through the apex.
The apex is expected to form in early October. A break below is often interpreted as a sell signal, while a break above is often interpreted as a buy signal. The price range bounded by ¥65,800 on the downside and ¥66,700 on the upside at the end of September is considered a useful guide to the market's likely direction.
The Ichimoku Cloud generated frequent false signals from July onward, but the market is expected to enter a period of more active movement toward the end of September. Daily price action is likely to break through the upper or lower edge of the cloud, and attention should also be paid to the relative positions of the conversion line and the base line, as well as the position of the lagging span relative to the daily chart.