Though it appears that U.S. markets may be preparing to take back some of those January gains, the government in Tokyo is now more focused than ever on stimulating the economy through fiscal and monetary measures and stocks are on the mend.
Click to EnlargeNomura (NYSE:NMR) is a major Tokyo-based brokerage. It traded as high as $22 in 2007 but has fallen since, in sync with the bruised fortunes of the Japanese economy. It announced earnings last week that were in line with what we have seen in U.S. and European banks. Shares have bounced off the 30-week average and should now progress toward new highs in the $7 to $8 area over the next couple of months.
The company’s fortunes are buttressed by the Japanese government’s decision to stimulate their economy with both fiscal and monetary policy. Nomura pulled back just a smidge yesterday in sync with the lower prices across the globe, and as you can see, NMR has no real resistance until around $8. As investors around the world reallocate funds to Japan, banks and brokers like NMR can be a top beneficiary. I suspect the recent range of $5.25 to $5.75 will hold and this area will be a springboard toward the $7.00 level.
InvestorPlace advisor Jon Markman operates the investment firm Markman Capital Insight. He also writes a daily swing trading newsletter, Trader’s Advantage which aims to capture profits of 15% to 40% and often as much at 100% to 200% in less than 90 days.
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