Nikkei 225 Chart Analysis (May 20) | Bearish Belt Hold -746 Yen, 60,000 Break and Descending Triangle Downside Breakout

The following technical analysis is based on data as of May 20, 2026.

The Nikkei 225 closed at 59,804.41 yen on May 20, falling 746.18 yen (-1.23%) for a 5th consecutive decline since 5/14's closing marubozu. Open 60,567.27, high 60,567.27 (open=high), low 59,292.25, close 59,804.41. A 763-yen midsize bearish body with 0-yen upper shadow and 512-yen lower shadow — a textbook bearish belt hold (open-high type). Critically, today also confirmed yesterday's descending triangle (support zone 60,256-60,937) downside breakout, simultaneously breaking psychological 60,000 / SMA25 / Bollinger middle. (Note: Today's volume was not yet finalized at writing time.)

■ Technical Indicators

Moving averages: SMA5 61,046.86, SMA25 60,100.65, SMA75 56,589.32, SMA200 50,999.84. Close 59,804.41 broke about 1,242 yen below SMA5 and 296 yen below SMA25. SMA25 deviation flipped to -0.49% — first negative since 5/7's historic surge. SMA75 deviation +5.68% (vs prior +7.17%), full overheating relief progressing.

RSI 50.59, down from 54.48, brushing neutral 50. MACD 1,192.44 / signal 1,540.77 / histogram -348.32. MACD dead cross fully progressing, histogram negativity expanded from -221.55 to -348.32 — trend reversal definitive. Stochastic %K 17.99 / %D 31.23 — approaching oversold, both near 30. Ichimoku: thick bullish cloud but price now inside cloud, holding just above kijun 59,781. Cloud break and three-fold bullish collapse are imminent.

■ Bollinger Bands

Upper 63,726.77, middle 60,677.97, lower 57,629.17, bandwidth 10.05%. Close 59,804 broke about 874 yen below middle 60,677 — rapid pullback from +2 sigma toward -1 sigma. Bandwidth narrowed from 10.11% to 10.05%.

■ Chart Pattern Analysis: Bearish Belt Hold + Descending Triangle Downside Breakout

Today's candle is a textbook bearish belt hold. Conditions: (1) topping-region appearance, (2) open=high (no upper shadow), (3) large bearish body, (4) negligible lower shadow. Here: (1) corrective phase since 5/14 closing marubozu (✓), (2) open 60,567 = high 60,567 with 0 upper shadow (✓), (3) midsize bearish body 763 (✓), (4) lower shadow 512 = 67% of body — longer than textbook (partial violation). Additionally, today confirmed yesterday's descending triangle (60,256-60,937 support zone) downside breakout. Today's low 59,292 broke 5/19's low 60,256 by about 964 yen. Bulkowski's statistics show post-breakout move equals triangle height (~3,000 yen), implying 57,000 as the intermediate-term target.

■ Support and Resistance

60-day range: 50,558.91 to 63,799.32. Today's close at 69.83%. Resistance: 60,567 (today's open=high), psychological 60,000 (former support, now resistance), SMA25 60,100, Bollinger middle 60,677, SMA5 61,046. Support: 59,292 (today's low), kijun 59,781, Fibonacci 61.8% (around 56,952), SMA75 56,589, psychological 58,000 / 57,000.

■ Volume and Sentiment

Volume not finalized at writing time. Volume over 5/15-5/19 ran 214M → 168M → 176M — without a base-formation rebound in the next 3-4 sessions, the probability of full corrective phase rises further. Multi-timeframe: daily uptrend (downgraded from strong_uptrend) / weekly strong uptrend / monthly strong uptrend — alignment disrupted. Long-term bullish stance preserved but daily corrective phase confirmed.

■ Market Environment

From 5/7's historic surge (+3,320 yen), 5 consecutive declines totaling -3,030 yen (-4.82%) of corrective action. Simultaneous breakdown of psychological 60,000 and descending triangle support zone signals collapse of buyer defense line. Overseas markets, FX, US VIX, and late-earnings responses determine the depth of the correction.

■ Outlook and Scenarios

Bullish: Holding kijun 59,781 + reclaim of psychological 60,000 / SMA25 60,100 invalidates belt hold; pullback test of 5/19 low 60,256 / SMA5 61,046 in scope. Bearish: Break below today's low 59,292 / kijun 59,781 accelerates full corrective phase; cloud break opens distance to Fibonacci 61.8% (around 56,952) / SMA75 56,589, with Bulkowski's descending-triangle target around 57,000 emerging as pressure. Neutral: 59,000-60,500 range for base confirmation while SMA25 deviation's negative turn cools.

■ Summary

May 20 quadruple bearish signal: bearish belt hold + descending triangle downside breakout + psychological 60,000 break + SMA25 deviation first negative turn. Key levels: upside 60,000 / SMA25 60,100, downside 59,292 / kijun 59,781 / 57,000. Whether kijun holds tomorrow determines if cloud break and three-fold bullish collapse can be avoided.

* This article provides information based on technical analysis and does not constitute a recommendation to buy or sell any specific security. Investment decisions are your own responsibility.