NIKKEI225 : THE BoJ ENDS THE NEGATIVE RATE ERA
- The Japanese benchmarks has been registering higher highs and lows since 2023, the long-term trend is therefore bullish.
- Since the bullish breakout of the flag pattern, prices have accelerated to a new all-time high at 40,470pts.
Since then, the market pulled-back over 38,525pts, mostly driven by profit taking following a sharp rally, as well as anticipation of an hawkish monetary move from the BoJ.
Both 13 and 21 period moving averages remain bullish and the MACD indicator stays well-oriented in buying zone, with no sign of a bearish divergence so far.
- On one hand, it would be understandable to expect a little correction, or lateral consolidation following the strong acceleration prices have registered since the beginning of 2024, especially as the market now trades in uncharted territory.
However, technical indicators don't show any sign of a slowdown to come so far, and the final objective given by the flag pattern consolidation hasn't been reached yet.
In addition, the market has surprisingly reacted quite well to the BoJ's first rate hike in 17 years, probably because of a "sell the rumor and buy the news" phenomenon.
Investors and analysts are now split regarding the next rate hike from the Bank of Japan, which means that any hawkish hints or wording during the next meeting could significantly put pressure on the market.
On the other hand, if BoJ Governor Kazuo Ueda maintains an overall dovish stance, this could further fuel the rally on japanese stocks.
For now the 41,400pts target remains valid if the market manages to clear the last 40,470pts resistance, and an extension towards 43,800pts is also a possibility.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
- Since the bullish breakout of the flag pattern, prices have accelerated to a new all-time high at 40,470pts.
Since then, the market pulled-back over 38,525pts, mostly driven by profit taking following a sharp rally, as well as anticipation of an hawkish monetary move from the BoJ.
Both 13 and 21 period moving averages remain bullish and the MACD indicator stays well-oriented in buying zone, with no sign of a bearish divergence so far.
- On one hand, it would be understandable to expect a little correction, or lateral consolidation following the strong acceleration prices have registered since the beginning of 2024, especially as the market now trades in uncharted territory.
However, technical indicators don't show any sign of a slowdown to come so far, and the final objective given by the flag pattern consolidation hasn't been reached yet.
In addition, the market has surprisingly reacted quite well to the BoJ's first rate hike in 17 years, probably because of a "sell the rumor and buy the news" phenomenon.
Investors and analysts are now split regarding the next rate hike from the Bank of Japan, which means that any hawkish hints or wording during the next meeting could significantly put pressure on the market.
On the other hand, if BoJ Governor Kazuo Ueda maintains an overall dovish stance, this could further fuel the rally on japanese stocks.
For now the 41,400pts target remains valid if the market manages to clear the last 40,470pts resistance, and an extension towards 43,800pts is also a possibility.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
