The 25-day moving average of advances vs. declines among TOPIX 1st Section components stands at about 69, while the Jasdaq is at 73. Typically, when around 75, the market is considered oversold. When approaching the 125 level, the market is in turn becoming overbought. TOPIX 2nd Section stocks are at 78. This has to deal with these stocks having consistently lagged larger caps and receiving renewed interest of late among investors looking for value picks in a neglected universe. As suggested in the prior post, Japanese stocks are likely to be range bound amid political uncertainty over the Abe administration and external pressures such as revaluation of risk stemming from U.S. housing/subprime mortgage weakness [pending credit crunch … perhaps at least for the PE guys] and less appetite for risk overall.

nikkei 225