Both the "up" and the "down" are becoming solidified (?) stock prices – Hiroshi Arano's "From the Technical Room"

Publication date: 2016/09/30 07:58

The bottoming process of the stock price has progressed,

and when the month ends, it will have been a month in which the daily lines moved up and down around the 5-day moving average (MA).
From the period up to 9/29, among 19 trading days,
the closing price above the 5-day MA occurred on 9 days and below on 10 days, showing a balance.
As a result, a sideway market continues.
However, even within the range-bound market, the bottoming process progressed from July into August
and September as well. Here, too, short-term moving averages align in a “bullish” order when arranged in one direction, and in the opposite order when arranged in the other direction, which allows us to test the following.







20-day MA > 5-day MA > Closing price
(Bottom zone) Low-price average
7/06~08 3 days 15,172
8/05 16,230
8/25/26 2 16,420
9/15~20 3 16,392
9/26/9/28 2 16,449

Following the United Kingdom's vote to leave the EU, there was confusion; in July prices seemed to have fallen too much, but
in August prices steadied around 16,000 and recently
price declines have not continued for long, and even when they fall they stay around 16,400
yen; this area is gradually becoming a lower bound. Unless something unexpected happens,
there is no breach of 16,000 and the range of 16,300–16,400
yen can be considered a target for the lower bound when sold due to cyclical factors.
This is what I think.



16,300–17,000 yen
is the central range being formed

On the other hand, the levels when prices rebound are also becoming more solid. Over the last three months, highs have been gradually rising, and having reached 17,000 yen, further upside will require positive new factors. At present, since corporate performance cannot be counted on, some waiting period is likely necessary.




For the time being, with the close price > 5-day MA > 20-day MA



(Return high zone) High-price average
7/13~21 6 days 16,634
7/27, 29, 8/01 3 16,726
8/10~15 3 16,897
8/30~9/07 7 16,976

Under the current environment, there is little directional clarity for the index, so it seems prudent to use options and invest with the assumption of a range-bound market.