NIKKEI 225 REBOUNDS AFTER CHRISTMAS SELL-OFF, MARKET SET-UP POSITIVE
Nikkei 225 futures are currently trading at 19530-higher by 1.19% as compared to the previous closing. However, the contract has been closing in the Negative territory since the last two trading sessions.
In the Cash Markets, the Nikkei 225 rose 0.89% to close at 19,327.06 on Wednesday, supported by short-covering. On Tuesday, the broad-market index plunged 5.01%-the steepest single-day decline in over two years. The searing sell-off left the index down about 21% from a 27-year peak hit in early October.
The Nikkei 225 seesawed in afternoon trading session and at one point fell more than 1%, before bouncing back in late session to end the day on the positive ground.
The broader Topix rose 1.12% to close at 1,431.47 on Wednesday. However, the benchmark was down 25.1% from a high of 1,911.31 scaled in late January.
Stocks of some index heavyweights rebounded, with Sony Corp. gaining 2.1%, Toyota Motor rising 1.1%, Nintendo adding 1.2% and factory automation maker Keyence rising 2.9% on Wednesday.
Electronics manufacturer Panasonic gained 2% while construction machinery maker Komatsu rose 2.4% and factory robot maker Fanuc Ltd. advanced 1.9% on Wednesday.
On the other hand, index-members SoftBank Group fell 1.4% and Fast Retailing lost 0.9%.
Exporters got a small boost as the yen moved off a four-month high against the dollar reached on Tuesday after Japanese top currency official said the government is ready to take necessary steps if the market becomes too erratic.
On the data front, the BoJ Core CPI (YoY) released earlier today came in at 0.5%. The CPI growth was below the market expectation of 0.6%.
On the technical front, the RSI is currently at 31.92% and suggests that the market can move in the upward direction. The current price is above the MA5 (19516). The current price is below the middle line of the Bollinger Bands but is heading upwards.
Overall Bias is Positive and Short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion-Limit Buy At 19490 Take Profit At 19610 Stop Loss At 19430