Nikkei Average plunges ¥5,856 ... Can it rise to ¥65,000? [Three directions forecast by analysts]

Japanese stocks plunged last week, with the Nikkei Average ending well below ¥60,000 at ¥57,434. Concerns about tighter AI regulation after the US midterm elections contributed to a weekly decline of approximately 9.25%. The Tokyo Stock Price Index (TOPIX) and other indexes also fell sharply. Although a rebound is expected in the near term, the market continued to suggest further downside. With the margin-call deadline and SQ date ahead this week, the market is at a stage where investors will assess whether it has bottomed.

The market's direction is still being assessed. Based on crosses in the daily moving averages and MACD movements, some believe downward pressure remains strong. At the same time, with the decline from the high approaching approximately 22%, buying may emerge at certain points. Some have also said that short-term range trading should be avoided because expectations surrounding the SQ and margin calls are overlapping.

From a technical perspective, the Nikkei Average chart is at a point where the upward 8×1 Gann angle and downward 3×1 angle intersect. Three possible directions have been proposed for future price movements: following the downtrend, moving sideways in consolidation, or entering a recovery trend. Some market participants currently envision a recovery to the ¥60,000 level or a rise to ¥65,000, but caution is considered necessary regarding short-term movements because these dates coincide with the margin-call deadline and SQ date.

Key figures and dates include the margin-call deadline on the 10th and the SQ date on the 13th. Futures also showed signs of turning higher over the weekend.

The three directions are: (1) a continued decline following the downward Gann angle, (2) a shift to consolidation in a range centered on ¥60,000, and (3) a recovery trend targeting around ¥65,000.