Nikkei setting a trap for bears?Japan 225 CFDFOREXCOM:JP225FOREXcomOur Japan 225 contract has been taken to the woodshed in recent sessions, accelerating an already well-established bearish trend. However, the price has stopped making fresh lows for now, consolidating between the June 17 low of 62,683 overhead and yesterday's low of 61,844. The 100-day simple moving average is also found around 62,350, making this an interesting zone for setups. With RSI (14) setting a higher high, suggesting bearish momentum may be starting to turn, while MACD is starting to converge on the signal line while holding in negative territory, there's enough there to keep bulls interested. Combined with thin pre-Fed liquidity and looming hyperscaler capex updates from the likes of Meta and Microsoft, it looks like a decent setup for a bear hunt. Normally, renewed hostilities in the Middle East, as we've seen over the past hour, wouldn't be a backdrop I'd associate with Nikkei upside. But that's not how this conflict has traded. When tensions have escalated, AI-related stocks have generally outperformed relative to cyclicals, suggesting the latest headlines need not scupper the setup. If we see the price break above 62,683 and hold there, longs could be set with a tight stop beneath for protection, targeting 63,310 initially, followed by 64,250. Beyond there, the June downtrend comes into play just above 65,000 today, marking the ultimate upside target for the trade. I'd struggle to justify expecting anything beyond that given the prevailing trend. As this is a tactical long setup that goes completely against the prevailing bearish trend, capital protection is paramount. Blindly buying the dip without a stop is asking for trouble. Should the price break convincingly beneath 61,844, the bullish setup would be null and void, pointing instead to an extension of the prevailing bearish trend. Good luck! DS