In the first half of the week for 3 days, it rises but cannot recover to 27,000 yen
This week's moves in the Nikkei Stock Average begin with the need to confirm a bottom in the Dow Jones and the Nasdaq in the United States; until that confirmation is made, the Nikkei will only hover in tandem with the moves of the Dow.
Last week, the index broke below the 26,500–27,500 yen range and closed near 26,500 yen at the end of the week; this week, a 26,500–27,300 yen range is expected.
On Monday the 16th, it rose to 26,836 yen, up as much as 409 yen, but it was rejected by the 25-day and 75-day moving averages and closed at 26,547 yen, up 118 yen; on Tuesday the 17th, it rose to 26,709 yen and closed at 26,659 yen.
Today, Wednesday the 18th, in the prior session the U.S. market showed the April retail sales beating expectations, and despite the Fed's rate hikes, consumption remained solid, easing inflation concerns; the Dow rose by 431 points, and all three indices posted strong gains.
In response, the Nikkei began higher, as on Monday and Tuesday, briefly reaching 27,053 yen and returning to the 27,000 level; however, it closed down 251 yen at 26,911 yen.
The upside is still heavy, but it rose above the 25-day moving average (26,730 yen) and the 75-day moving average (26,823 yen).
In this week's forecast, the initial target is to break through 27,580 yen on April 21, but that remains distant. The key is whether the index can climb to the 27,000 yen level and establish a base this week.
The Dow Jones has rebounded strongly and is testing the gap at 33,000 dollars. Since the downside has not yet been confirmed, there is a possibility of a zigzag pattern with sharp rises followed by declines, potentially moving lower.
For Japanese stocks with solid earnings, buying those that have fallen significantly with the aim of a 10–15% rebound is recommended.
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