Nikkei strategy for two weeks!

Japan’s stock market anomalies worked out perfectly last month.

The half-of-the-month effect was over with the index growth by 3.4%, the turn-of-the-month effect resulted in 1% growth.

The second half of August has already started, so we can trade on these anomalies again.

Regarding the fundamental causes of index growth, they are the rising stocks of Nintendo, which is one of the most valuable and rich companies on the Japanese market, as well as the stocks of the Uniqlo company, as both companies have already reported their results for the previous period.

The finished quarter was a success for Nintendo, despite a little drop in revenue and operating profit. At the same time, earnings per share have exceeded analysts’ expectations by 13%.

A report from Uniqlo has reflected a record operating profit, and that fact quickly affected the prices of the company’s stock.

High sales in the U.S. and a weaker yen contributed to the increase in the company’s profits, compensating for the sales decline due to the pandemic in the Chinese market, where the company owns about 900 stores.

Considering the facts presented above, the further growing on index is expected.

So, here are possible ways of entering the market:

1. Buying the Nikkei from the market at the current price.

Target orders Take Profit 1, Take Profit 2 and Take Profit 3 might be the levels 29400, 30000 and 30500 respectively.

The Stop Loss order put below the level of 28700 can minimize the losses.

Close the position at the end of trading on August, 31, or September, 2.

2. Buying/adding a position of Nikkei at the opening of trading on August, 25.

Then, the target orders Take Profit 1 and Take Profit 2 would be levels 30000 and 30500.

Place the Stop Loss order below 28700.

It’s possible to partially close the position at the end of trading on August, 31, and close the rest on September, 2.

Remember about the spread and the rules of capital management.

Warning! 

Trading on financial markets implies high levels of risk and can lead to a loss of investment capital. The MarketCheese team isn’t responsible for the possible loss of Your investment funds.