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Charts: Nikkei is Showing 'Death Cross' Pattern

CNBC.com
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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.

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Charts: Nikkei Showing 'Death Cross'

"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.