Hedge fund pro: Nikkei 225 and Topix indices have more upside
The Nikkei 225 index bull run continued on Monday as investors continued buying the country’s stocks. It soared to a high of ¥32,072, the highest level since 1990. In all, the index has jumped by over 21% this year, outperforming the S&P 500, DAX, and CAC 40 indices. The Topix index has also jumped to a multi-decade high of ¥2,210.
Hedge fund pro is bullish on Japanese stocks
The Nikkei 225 index has been in a strong rally as foreign investors continued buying the stocks. Most of this rally happened after the recent trip by Warren Buffett, one of the most respected investors in the world. He has continued adding positions in the biggest trading houses in the country.
Now, some analysts believe that Japanese stocks have more room to run, citing their cheap valuations compared to peers.
One of those analysts is Seth Fischer, the founder and CIO of Oasis Management. Oasis is a Hong Kong-based hedge fund that invests around the world. Its primary focus is on Asian stocks.
In an interview with Bloomberg, he argued that Japanese stocks had more upside despite the strong comeback this year. He cited the fact that many Japanese companies were highly profitable, had cheaper valuation multiples, and were returning money to investors through buybacks and dividends.
Further, Fischer noted that Japanese stocks in the Nikkei 225 and Topix were receiving tailwinds from a combination of domestic and foreign investors. Foreigners have bought Japanese stocks for nine straight weeks, which is a positive thing.Watch here: https://www.youtube.com/embed/lh9_yhQ_bsE?feature=oembed
Most companies in the Nikkei 225 index have been in a bullish trend this year. The best performers in the index are Advantest, Kobe Steel, Dainippon Screen, and Toppan Printing. Well-known companies like Mitsubishi Electric, Panasonic, Mitsubishi Corp, and Marubeni have all rallied this year.
Nikkei 225 index forecast
The daily chart shows that the Nikkei 225 index has been in a strong bullish trend in the past few months. As a result, it has soared above all moving averages and the important resistance point at 30,000. It has now cleared the psychological level at ¥32,000.
The Nikkei 225 index has moved to the overbought level. Therefore, there is a likelihood that this momentum will continue, with the next level to watch being at ¥32,250.
If this happens, the Topix index will also continue surging. The Topix has jumped to a multi-decade high of ¥2,213 and could jump to ¥2,500.
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