Riding on broadly positive risk sentiment, Japan’s stock indexes surged to highest level in over two months. Topix finished 0.31% higher while Nikkei rose 0.56%. Among the gainers, air and land transportation shares are lifted by optimism that tourism is coming back to Japan.
Based on current momentum, Nikkei should be ready to resume the whole rebound from 24681.74. 28338.81 resistance is the first test, and break will target 100% projection of 24681.74 to 28338.81 from 25688.10 at 29345.17. For now, it’s still too early to call for long term up trend resumption in the index. 30k handle could still present huge psychological resistance. But in any case, further rally will remain in favor as long as 27251.24 minor support holds.
Meanwhile, it should also be noted that the long term outlook in Nikkei is staying bullish, despite the correction that lasted one and half year. It’s holding comfortably above 24129.34 structural resistance, as well as 55 month EMA. Both are keeping the up trend from 6994.89 (2008 low) intact.