Since the beginning of the year, the Japanese main index lost more than 2.0% but last week was no different falling more than 1.5% and potentially in phase change, shifting from a bullish to a distribution phase.
Last week the Japanese index initially rose but found enough selling pressure near the 23.6 Fibonacci retracement to reverse and closed near the low of the week, in addition, managed to close below the previous week low, which suggests a strong bearish momentum.
The stochastic is showing a strong bearish momentum however is still above the 50 midline.
The Japanese Index is approaching again the 50-week moving average will it bounce again or will it breach below it. Nikkei 225 may find some support shy below the 50-week moving average where the 38.2 Fibonacci retracement at 21,925 is.
Expecting an upward move to a weekly resistance at 22,470 on a bounce from the 38.2 Fibonacci retracement at 21,925 (scenario 1) however, a break below the 38.2 Fibonacci retracement at 21,925 may bring the bears into the market pushing the index lower toward the 50 Fibonacci retracement at 21,222 (scenario 2).