NIKKEI 225 EXTENDS SELLOFF TO BELOW MA5, BOJ IN FOCUS
Nikkei 225 futures are currently trading at 21185-lower by 0.32% as compared to the previous closing. The index futures closed in Negative territory in the last trading session also.
In the Cash Markets, the Nikkei 225 rose 0.62% to close at 21,506.88 on Monday. Previously, the index fell 2% on Friday on the back of grim Chinese data which also knocked U.S. Markets. The benchmark rose today, recovering some of the sharp losses seen at the end of last week as traders picked up battered stocks, but the upside was capped by rising concerns over global growth.
The broader Topix inched up 0.13% to close at 1,594.20 on Monday. The markets expect that investors are still cautious about further signs of a slowdown in global growth – a factor reflected in the underperformance of the Topix today. The bounce today is primarily due to short-covering as markets expect selling of large cap stocks is overdone.
Machinery and technology stocks gained today after selling off last week on worries about China’s weak retail growth and industrial output data. Index-member Advantest Corp gained 2.07%, while Tokyo Electron and TDK Corp. both jumped 1.8% on Monday.
Weaker oil prices lifted utility stocks on hopes of lower costs. Tokyo Electric Power added 3% and Chubu Electric Power Co. gained 1.9%.
Stocks of conglomerate Softbank recovered from earlier losses during the session to gain 0.52% today ahead of the anticipated public listing of its mobile unit on 19th December.
On the other hand, mining shares closed in negative territory on Monday. Inpex Corp lost 1.7% on Monday. Discount children’s wear operator Nishimatsuya Chain dived 8.6% after the company cut its full-year net profit forecast by 42% to 3.33 billion yen for the year ending February due to weak sales of baby clothes.
On the technical front, the RSI is currently at 41.59% and suggests that the market can move in the downward direction. The current price is below the MA5 (21393). The current price is below the middle line of the Bollinger Bands and is heading downwards.
Overall Bias is Negative and Short-term trades can be initiated with tight Stop Loss and Take Profit targets.
Trade Suggestion-Limit Sell At 21220 Take Profit At 21100 Stop Loss At 21280