CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Ducks have lined up for Nikkei 225 to test its 1989 high

Article By: ,  Market Analyst
February 21, 2024 10:54 PM
  • A big earnings beat from Nvidia has seen US stock futures rise strongly after hours
  • With a number of fundamental factors working in its favour, the setup suggests the Nikkei 225 may retest its prior record highs set in December 1989.

Nvidia shares flying in afterhours trade after another earnings beat, providing a tailwind to tech stocks globally. Slightly steeper yield curves in developed markets, providing banking stocks juice for margin expansion. USD/JPY offered against a basket of G10 currencies, keeping the outlook for Japanese exporter earnings buoyant.

If there was ever a day for Japan’s Nikkei 225 to overcome its demons and take out the record high set in December 1989, few screen better than today. The ducks look to have lined up for Nikkei bulls. If we can’t set a new peak, it may provide a subtle warning that the market has run too hard, too fast.

Japan’s bluechip index sits only 700 points from the intraday record of 38,957.44, a mere 1.8% from where it closed Wednesday. Gains of that magnitude have been seen frequently this year since the index broke resistance at 33750, triggering the latest run higher.

Nikkei 225 eyeing record high

Looking at Nikkei 225 futures in Singapore, the first upside target for longs is 38855 where futures stalled late last week. Should that be taken out, the intraday record for the physical index will be squarely on the radar.

For those considering entering longs now, a stop below 38080 – where futures bounced on Wednesday – could be used for protection. Should the trade move in your favour, you could push it higher to your entry point, providing a free option looking for upside. As for potential targets above the 1989 peak, recent history suggests markets may gravitate towards round numbers such as 39000 and 40000 given the absence of technical levels.

Another trade idea could be to buy a clean break of 38855, allowing the level to be used for protection with a stop-loss order below.

-- Written by David Scutt

Follow David on Twitter @scutty

 

How to trade with City Index

You can trade with City Index by following these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    • Open an account in the UK
    • Open an account in Australia
    • Open an account in Singapore

  2. Search for the market you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024