- JP 225 index has been steadily advancing in the short term
- On Wednesday, price jumped to its highest since April 12
- Momentum indicators are heavily skewed to the upside
The JP 225 index (cash) had been trading without clear direction since early May, fluctuating around its 50-day simple moving average (SMA). In the near term, the price broke above that crucial barrier and edged higher to a fresh two-month high.
If the price extends its recent gains, the April resistance of 39,950 could curb initial upside attempts. Surpassing that zone, the price could ascend towards the March resistance of 40,564. Should that barricade also fail, a test of the all-time high of 41,147 might be on the agenda.
On the flipside, a break below the 50-day SMA could send the price to test the March support zone of 38,300, which also held strong earlier this month. A violation of that territory could open the door for the May low of 37,600. Failing to halt there, the index could descend towards the April bottom of 36,690.
In brief, the JP 225 index’s latest break above the 50-day SMA coupled with improving momentum indicators could signal the beginning of an uptrend.
