Is Nikkei firm on continuation downward?

In my last update on Nikkei "Is Nikkei beginning it's descend?" dated 20th April 2024,I estimated that Nikkei is likely to correct before continuation on its descent as its descent at the time was supported by its 21-week moving average. 

Since then, Nikkei indeed corrected until this week, when it tests its 8-week moving average only to retreat by the end of the week, creating a potential hammer candlestick.

Does it mean Nikkei is going to continue its journey downward from now?

Fig 1. Nikkei weekly chart

Let's start with the gradient of its uptrend, which is very steep, it indicates momentum upward prior to its descent. It follows by the hammer this week which Nikkei fails to break through, giving me impression that there is some weakness in its fall. It is possible that Nikkei is presently correcting and will head higher after that.

The next question is whether Nikkei has completed its correction or there are more down side?

While supported by both its 8 and 21-week moving average this week, I believe that it will retest these supports before heading down towards its 55-week moving average, which coincide with the 100% projection support presently at 35,077. 

What if I am wrong?

Then we will see its resistance at the Bollinger envelop at 40,772, which also coincide with its 127% projection resistance.

The thing is that Nikkei has already crossed the 100% projection resistance of a major move and there is limited upside. The chance of it heading downward is higher. 

Will it break 55-week moving average and make its descent more permanent?

That will depend on it momentum in its next phase.