Charts: Nikkei is Showing 'Death Cross' Pattern
The Nikkei 225 is currently showing the "death cross" pattern, which is a bearish signal for the Japanese index, Joel Stainton, technical analyst at SEB Future Sales, told CNBC Friday.
"This is something to get all the chart guys excited, this is what's called a death cross," Stainton said.
The death cross happens when the 100-day moving average is cutting down through the 200-day moving average, he said.
"You see it quite a lot, but there is one key condition that's fulfilled here and that is that the 200-day moving average must be falling at the same time," Stainton said.
"It is here, that is a very negative signal and the fact we can't break up through the 50-day either — the Nikkei unfortunately looks pretty bearish," he added.
Daryl Guppy, CEO of Guppy Traders and CNBC contributor, told CNBC Monday that the Japanese index is testing a support level at 9,000 points. Guppy added that there is currently a downtrend in place for the index.
"A fall below 9,000 gives us a 7,600 target and that's relatively achievable. We need to move about 9,400 before we can say that this downtrend line is invalidated and a break out from there would give us resistance around 10,600," he said.