Despite Tuesday’s wobble on Asian stock exchanges, the Nikkei 225 index was able to notch gains of 1.03% on the back of energy sector gains and new demand for tech stocks. This gain adds to the 0.8% uptick seen on Monday.
The near-270-point gain on the Nikkei 225 came as investors snapped up beaten-down tech stocks. The fastest expansion in Japan’s service sector business activity since Q4 2013 also pleased investors. This is the third month in a row that this metric has surprised to the upside, as COVID-19 restrictions are lifted across the island nation.
The Japan Services Purchasing Managers’ Index rose from a final reading of 5.2 in May to 54.0 in June, buoyed by an increase in new business orders in the services sector for the second consecutive month.
The bulls need to force a break of the 26961 resistance (neckline of the emerging double top pattern) to complete the pattern and clear the pathway for a measured move toward 28304. This move must achieve clearance of the 27573 resistance (3 February and 21 April highs). Above the calculated move’s completion point, additional northbound targets are found at 29129 (29 December 2021 high) and 29435 (26 October 2021 high).
On the other hand, the bears need a retreat below 25735 for the 25,000 psychological price mark to enter the picture as the immediate downside target. This must follow a rejection at 26961. Further south, 24675 forms a new target if the 25,000 price mark only serves as a pitstop for the bears. The 13 December 2019 and 20 January 2020 highs at 24,000 comprise the short-term downside targets.
This post was last modified on Jul 06, 2022, 09:22 BST 09:22