The Nikkei 225 remains range-bound between its 5-day, 25-day and 75-day moving averages, shifting this week's focus to whether it can move above the 75-day line. Momentum could also influence the market's direction ahead.
The Nikkei 225 continues to trade around its 5-day moving average and remains flat around its 25-day moving average. While the 75-day moving average continues to trend gently upward, the index remains caught between the two lines. This week, which of these two moving averages the index breaks is expected to be the key to the emergence of a trend.
If the Nikkei 225 can move above and hold above its 75-day moving average, both the 5-day and 25-day moving averages may turn upward, creating a golden cross and raising the possibility of a gap fill. Conversely, if the Nikkei 225 falls below the 25-day line and cannot recover, a dead cross may form, with the 5-day line becoming resistance. A decline toward a downtrend, accompanied by a gap fill and a break below support, may then warrant caution.
Although the momentum indicator is below the zero line, it is currently beginning to turn upward and, together with the moving averages, may provide a basis for assessing the stock market's direction ahead. On the weekly chart, the direction and levels of the two lines will be important clues. If momentum remains above the zero line, the index may be able to hold above the 75-day line, while a continued downward turn would make a gap fill and a break below the support line increasingly likely.