NIKKEI 225 RISES ABOVE MA5 ON CHIP SECTOR GAINS; PMI AWAITED
Nikkei 225 futures are currently trading at 21630-higher by 1.12% 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 added 0.95% to close at 21,620.88 on Tuesday. It was its highest closing level since 12th July. The benchmark index rose today as the semiconductor sector rallied, although trading remained subdued due to upcoming domestic earnings season.
The broader Topix advanced 0.80% to close at 1,568.82 on Tuesday.
Stocks of Chip companies rose after the U.S. President agreed with the heads of top technology companies to make timely decisions on whether U.S. firms could sell their products to Chinese tech giant Huawei Technologies on Monday.
The Japanese chip sector gained on Tuesday with index-member Tokyo Electron rising 3.04%.
Apple components makers also outperformed on Tuesday after reports disclosed that Apple was in advanced talks to buy Intel’s smartphone-modem chip business. TDK Corp jumped 2.18%, Murata Manufacturing rose 2.48% and Alps Alpine Co added 2.33% on Tuesday.
Stocks of SoftBank Group surged 4.03% after reports disclosed that U.S. regulators would approve the postponed merger between T-Mobile US Inc. and Sprint Corp.
Retailers also rose on Tuesday, with Marui Group rising 0.39% and J. Front Retailing gaining 1.74%.
On the other hand, stocks of Food companies ended in negative territory today. Takara Holdings lost 0.90% and NH Foods fell 1.98% on Tuesday.
Index-components Shin-Etsu Chemical Co and Canon Inc. are scheduled to report their quarterly earnings after the market close on Wednesday.
On the economic front, the Preliminary reading of the Japanese Manufacturing PMI for July is scheduled to be released early on Wednesday. The PMI is expected to rise to 49.7 from 49.3 in the previous month.
On the technical front, the RSI is currently at 56.94% and suggests that the market can move in the upward direction. The current price is above the MA5. The %K has crossed the %D from below to the upside at around 24% 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 At 21610 Take Profit At 21725 Stop Loss At 21550