by Pinchas Cohen
The TOPIX bounced off its 50 and 100 dmas today, advancing by 0.52% to the top of its trading range, for the fourth trading day. Should the key Japanese index clear this congestion area, it would return to the top of its trading range since December, which was the end of the first leg of the “Trump Trade,” at the 1,580 price level. This is the bears' line-in-the-sand.
If the current range—established last Wednesday—holds, and a breakdown below the 50 and 100 dma were to take place, the April low of 1,450 will be tested.
Should the index break free to the upside, it may retest the bears’ line-in-the-sand, the top of the five-month trading range, at 1,580. If the bulls are able to break through the bearish ceiling, we can expect a violent upside breakout of a thousand points, or a 7+ percent jump.