NIKKEI 225 RISES ABOVE MA5 HELPED BY MACHINERY, AUTOMAKERS FIRMS

Nikkei 225 futures are currently trading at 20895-higher by 2.20% as compared to the previous closing. The contract closed in the positive territory in the last trading session also.

In the Cash Markets, the Nikkei 225 rose 2.61% to close at 20,864.21 on Tuesday. Previously, the broad-market index closed at its lowest level since early January on Friday. Japanese stock markets were closed on Monday for a public holiday. The benchmark rose today as stocks of exporters such as automakers and machinery makers enjoyed strong demand due to a weaker yen.

The broader Topix advanced 2.16% to close at 1,572.60 on Tuesday.

Among top gainers, Taiyo Yuden rose more than 20% after it said its net profit for the April-December period jumped 58% and raised its dividend payout outlook. The company also said it would buy back 2 million of its own stocks, or 1.6% stocks outstanding, worth up to 3 billion yen.

Isuzu Motors climbed 7.8% after its operating profit for April-December jumped 17% to 144.13 billion yen due to strong sales of pickup trucks in Asia.

The dollar has gained against the yen over the last week, pushing up earnings prospects for auto, machinery, and electronics products makers. A weaker yen boosts Japanese exporters’ profits made abroad when repatriated.

Other top gainers in the index include- Haseko corp. (rose 16%), TDK corp. (rose 6.2%) and Sumco corp. (rose 5.8%) on Tuesday.

On the other hand, Toshiba Corp fell 5.9% after the Nikkei business daily said that the company is set to slash its operating profit forecast for the year through March to between 20 billion yen and 30 billion yen, with rising costs in sectors such as energy dragging down earnings from core operations. The company said that the Nikkei report was not based on something it announced, but the figure is close to what the company estimates.

On the economic front, Machine Tool Orders (YoY) for January released earlier today came in at -18.8%. Previously, Orders fell 18.3% (YoY) in December.

On the technical front, the RSI is currently at 56.98% and suggests that the market can move in the upward direction. The current price is above the MA5. The %K has crossed %D from below to the upside at around 25% and suggests that the market can move in the upward direction.

Overall Bias is positive and Short-term trades can be initiated with below mentioned Stop Loss and Profit targets.

 

Trade Suggestion-Limit Buy At 20875 Take Profit At 20995 Stop Loss At 20815

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