The entire complex correction in the Nikkei index has played out in the downward sloping channel. Within wave (Z), it looks like the Nikkei index has formed an ending diagonal, and possibly the entire corrective pattern is near completion. With the daily momentum indicator now turning bullish, the index is hinting towards the start of the next leg of the up move. On the way up, the 20DMA and the 40DEMA, which are currently pegged at 28072 and 28302 respectively will be crucial resistance levels in the near term. The bulls will have an upper hand once the index starts trading above the key daily moving averages. On the way down, the lower end of the ending diagonal is currently pegged at 27065.