Since the beginning of the year, the Japanese main index lost over 3.5% but last week rallied more than 2.5% and is in a warning phase since early February 2018.
Last week the Japanese index initially fell but quickly found support near the 50-week moving average to reverse and closed near the high of the week, in addition managed to close within the previous week range, which suggests being slightly on the bullish side of neutral.
The stochastic is a strong bearish momentum and crossed below the 50 mid line.
After earth reentry, the Japanese Index bounced of the 50-week moving average and is now holding above 50% Fibonacci retracement where it seems to be consolidating.
Expecting an upward move to a Fibonacci retracement at 22,795 on a break above the previous week high at 21,920 (scenario 1) however a bounce from the Fibonacci retracement at 22,795 may rattle the bears again pushing the index toward the Fibonacci retracement at 21,223 (scenario 2).