Nikkei down 0.9 pct but remains above 7-mth low

* Nikkei holds above 50 pct retracement near 9,200

* Next targets lies around 9,000, 8,500

* MACD starts to flatten out; slow stochastic climbs up

* Exporters give back some gains after rebounding on Tuesday

By Aiko Hayashi

TOKYO, July 7 (BestGrowthStock) – Japan’s Nikkei average fell 0.9
percent on Wednesday as shares of exporters that rose the day
before gave back some gains, but the index remained above a
seven-month low hit on Tuesday.

Heightened fears about a slowdown in the U.S. economy after
jobs data last week have exacerbated a bearish trend since April
but market players said support at a key retracement level around
9,200 is expected to hold for now.

On Tuesday, the Nikkei slid as low as 9,091.70 before
rebounding, helped by a rise in Shanghai shares.

“There’s little short-covering left today because investors
moved to cover short positions yesterday after the Nikkei managed
to avoid breaking below 9,000,” said Kenichi Hirano, operating
officer at Tachibana Securities.

“The market has yet to reach a verdict, but a sense of relief
could spread if the Nikkei were to be able to keep above that
level, despite confusion in Europe, a slowdown in America and
volatile currency moves.”

The benchmark Nikkei (.N225: ) fell 82.10 points to 9,255.94,
while the broader Topix (.TOPX: ) slipped 0.8 percent to 840.16.

On Tuesday a rise in Shanghai stocks, as investors bought
banking and property shares ahead of the pricing of AgBank’s
massive IPO, had helped improved sentiment in Tokyo.

Immediate support for the Nikkei is at 9,200, a 50 percent
retracement of its move up from its March 2009 low to its April
2010 high and its MACD, a measure of market momentum, has started
to flatten.

Its slow stochastic — a measure of how oversold the market
is and whether it is in a short-term up or down trend — has
turned higher after falling in June, moving further away from
oversold territory.

If the Nikkei fails to hold onto its gains, the next chart
support is seen at 9,076, a trough touched last November.

A large number of option triggers on Nikkei futures are said
to lie at 9,000 and 8,500, and the market remains gamma short —
meaning traders need to follow market moves to hedge their books,
often leading to volatile moves.


Honda Motor Co (7267.T: ) and other exporters slipped after
rising on Tuesday when the Nikkei rebounded from a seven-month
low, buoyed by gains in Chinese shares.

Honda slid 2.3 percent to 2,506 yen, Canon Inc (7751.T: ) lost
1 percent to 3,315 yen and Tokyo Electron (8035.T: ) shed 2 percent
to 4,655 yen.

Renesas Electronics (6723.T: ) gained 3.8 percent to 786 yen
after the world’s No. 5 chipmaker said it would buy Nokia’s
(NOK1V.HE: ) wireless modem business for about $200 million and
that they would work together to develop next-generation modem
technologies. [ID:nLDE6650IG]

Showa Denko (4004.T: ) rose 3.1 percent to 166 yen after the
Nikkei business daily said the company is expected to report a
climb in operating profit for the six months ended June 30 on
strong demand for flat-panel displays, for which Showa Denko
provides aluminium parts.

Mitsubishi Materials (5711.T: ) and other non-ferrous metal
smelters rose after metals prices climbed across the board on
Tuesday in tandem with stock prices. [ID:nLDE6650M2]

Mitsubishi Materials gained 1.8 percent to 228 yen, while
Furukawa (5715.T: ) rose 1.1 percent to 93 yen.
(Editing by Edwina Gibbs)

Nikkei down 0.9 pct but remains above 7-mth low