Chartbook: Chart JP Nikkei Update: Consolidating below 40000 level - scope for break

Settled back from test of the 40000 level at the start of Q4 as prices consolidate strong rally from the August spike low at 31156. Bullish run-up from the latter suggest scope for eventual break higher to further extend gains within the bullish channel from the 2020 year low.

Above the 40000 level will turn focus higher for retest of the March high at 41087. Clearance here will open up the 42426 July all-time high to retest. Gains beyond the latter, if seen, will further extend the underlying bull trend from the 2008 low and see scope to target the upper channel which comes in around the 44000/44200 area in 2025 Q1.

Meanwhile, support at the 37500 congestion now protecting the downside. Below here will open up room for pullback to the 36000 level and 35248, September low. Failure to hold the latter will see room for pullback to retest support at 33850, the 2023 year high. Lower still will return focus to the lower channel near the 32470, 38.2% Fibonacci level, and extending to the 32000 level.