Where does the momentum to chase higher prices appear in the data? Mr. Hiroshi Arano

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Where does the momentum to push prices higher show up in the data

Broadcast date: 2020/11/13 07:00

Deviation from the 20-day moving average: +3% or more

Judging from moves in European and U.S. stocks and the Nikkei's after-hours trading, the Nikkei's rally will end after eight days,

it is expected to become the first day-over-day negative for this month. Unless the drop exceeds 2% from the previous day,

this can be considered a natural pause following the rally.

The deviation from the 20-day moving average, which has been the near-term focal point, has been as shown in the table since the start of the month.

(Deviation from the 20-day moving average)

11/01 -0.81% 11/04 +0.84% 11/05 +2.44% 11/06 +3.22%

11/09 +5.13% 11/10 +5.11% 11/11 +6.59% 11/12 +6.89%

The momentum to chase higher will depend on whether the deviation stays at or above +3%.

At present, it has remained above +3% for five consecutive days since last Friday.

Since the start of this year, the periods with deviation of +3% or more for five days or more are as shown in the table below.

+3% or more period, days, high during the period

4/07–4/20 10 days +1,321 yen

5/25–6/11 14 days +2,790 yen

11/6–12 5 days +1,415 yen

As long as the +3% deviation is maintained, the upside momentum will not weaken.

As of yesterday, the 20-day average is 23,876 yen. The +3% deviation as of yesterday is 24,592 yen.

As long as it remains in the 25,000 yen range, the market is expected to stay firm.

Unless there is a sharp decline, there will still be room for upside.

Written by Hayakawa