NIKKEI 225 RISES ABOVE MA5 ON TECH STOCKS GAIN
Nikkei 225 futures are currently trading at 21690-higher by 0.16% 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 gained 0.11% to close at 21,754.27 on Tuesday. The benchmark index hit its highest level of 21,784.22 since 7th May earlier in the session. The broad market index edged up today as traders were cautious after the previous day’s rally over Sino-U.S. trade talks.
Gains in the Railway & Bus, Real Estate and Paper & Pulp sectors also led Japanese stocks higher on Tuesday.
The Nikkei 225 has jumped 2.13% on Monday as risk sentiment improved after the U.S. and China agreed on Saturday to restart trade talks and that Washington would hold off on slapping new tariffs on Chinese imports.
Stocks of tech-related companies rose today after their U.S. peers gained overnight. Screen Holdings surged 4.5%, Tokyo Electron added 2.97% and Mitsubishi Electric Corp jumped 0.85%.
Index member Fujifilm Holdings gained 1.45% after news that it will team up with drugmaker company Bayer to develop a cancer treatment.
Companies with high exposure to China such as factory automation machinery firms and construction equipment makers were traded mixed on Tuesday. Komatsu Ltd gained 0.45% while Yaskawa Electric lost 0.13%.
On the other hand, stocks of index heavyweights underperformed today. Fast Retailing dropped 0.99% and Fanuc Corp lost 0.68%.
The broader Topix added 0.31% to close at 1,589.84 on Tuesday.
On the economic front, Japan’s Bank Lending for June is scheduled to be released early on Wednesday. Bank Lending is expected to increase by 2.2% in June on a year-on-year basis.
On the technical front, the RSI is currently at 64.01% and suggests that the market can continue trading sideways. The current price is above the MA5. The %K has crossed the %D from below to the upside at around 43% 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 21670 Take Profit At 21785 Stop Loss At 21615