The Nikkei 225 rebounded on the 23rd after briefly falling below its 200-day moving average. This article examines the outlook and key points based on the conditions for a Granville's Rule buying pattern and momentum trends.
Last week, the Nikkei 225 hit ¥61,462 during trading hours on 23 October and briefly fell to the ¥61,000 range, but the decline was halted near the 200-day moving average. The article evaluates this movement against one of the buying patterns under Granville's Rule: a buy signal occurs when the 200-day moving average is rising and the stock price rebounds after falling below it.
On 27 October, the Nikkei 225 closed above its 5-day moving average, raising expectations for a continued rebound. The article notes that a buy signal could be confirmed if the 5-day MA can function as a support line, while a renewed decline after failing to maintain levels above the 5-day MA would carry the risk of breaking below the 200-day MA.
Momentum fell to its lowest level on 22 October before turning upward on 23 October. On the 26th, the decline from the previous day was contained, and on the 27th both momentum and its signal turned upward. Depending on future levels, the decline in downward momentum and the continuation of a recovery trend may be possible.
The focus going forward will be whether momentum can rise above the zero line and maintain an upward trend, and whether the 5-day MA can be maintained without turning downward again. The risk scenario is expected to depend on whether the Nikkei 225 falls below its 200-day MA.