Nikkei powers up on Intel, shoots above resistance

* Tech shares surge on optimism after Intel earnings

* Komatsu powers higher after lifting forecast

* Next target 10,000,then 10,250, but will take time-analyst

* Selling of futures around 9,800 capping gains -analyst

* Highest volume in over a month

By Elaine Lies

TOKYO, July 14 (BestGrowthStock) – Japan’s Nikkei surged nearly 3
percent on Wednesday, breaking above key resistance, with
chip-related shares powering higher after Intel results beat
expectations to ease fears about the U.S. economic recovery.

In active trade, the benchmark also got a boost from Komatsu
(6301.T: ), which lifted its full-year forecast by 14 percent,
citing better-than-expected first-half sales in Asia and Latin
America, as well as a pick up in demand in Japan and the United
States. [ID:nTOE66C04V]

Resilient demand for personal computers and servers helped
Intel Corp’s (INTC.O: ) margin and revenue forecasts, out after
the bell on Tuesday, blast past expectations, allaying fears of
a possible tech spending slowdown and setting an upbeat tone for
the industry’s earnings season. [ID:nN12197658]

The announcement came on the heels of better-than-expected
quarterly earnings from Alcoa (AA.N: ) the day before, giving
heart to investors who had fled to the sidelines on jitters
about the economic recovery. [.N]

“There’s been growing doubts about the health of the U.S.
economy, but these better-than-expected Intel results have
really changed sentiment in the market,” said Toshiyuki
Kanayama, a market analyst at Monex Inc.

“Wall Street rose strongly, there was Intel, and the yen is
also weaker. A lot of good factors for stocks are now lining
up.”

Some analysts said the Nikkei was playing catch-up with
overseas markets after it dipped yesterday following the Alcoa
results. By contrast, the FTSE 100 (.FTSE: ) rose 2 percent and
the Nasdaq (.IXIC: ) 2 percent as well. The Dow gained 1.5
percent.

The benchmark Nikkei (.N225: ) surged 2.7 percent, or 258.01
points, to 9,795.24, while the broader Topix (.TOPX: ) gained 1.9
percent to 870.73.

Trade was active, with 2.3 billion shares changing hands on
the Tokyo exchange’s first section, the heaviest volume in more
than a month. Advancing shares outnumbered declining ones by
more than 7 to 1.

Market players said short-covering emerged after the Nikkei
broke above its 25-day moving average at around 9,960 and
additional resistance on its daily Ichimoku charts at around
9,670, which was its kijun-sen.

The kijun-sen is an indicator of medium-term trends that can
be either support or resistance but is currently pointing
sideways, while Ichimoku charts are a popular charting method
among Japanese traders.

In addition, the Nikkei’s MACD continued rising after a
bullish cross.

But some in the market remained wary, noting that further
rises could be hard to achieve.

“There’s selling of futures at around 9,800, and this is
likely to cap gains for now,” said Hiroaki Kuramochi, chief
equity marketing officer at Tokai Tokyo Securities.

“Also, even though Intel may be good, there’s some concern
about the bank earnings later this week, with good results for
them necessary for the market to go much higher.”

JPMorgan Chase & Co (JPM.N: ) and Bank of America Corp (BAC.N: )
both announce this week.

LONG POSITIONS

An accumulation of long positions in the market, especially
in blue-chip exporters, means that any further rises are likely
to take time, Kanayama added.

The Nikkei’s next target is 10,000 and then around 10,250,
the level of its June high.

Toyota Motor Corp (7203.T: ) and other carmakers surged, with
Toyota up 4 percent to 3,250 yen and Honda Motor (7267.T: )
climbing 3.9 percent to 2,741 yen. Gains were seen as mainly due
to a slightly weaker yen and the boost in overall sentiment.

Toyota said on Wednesday its investigation of nearly 2,000
cases of unintended acceleration had found no problem with its
electronic throttle system, and that driver error was to blame
in some cases. [ID:nTOE66D02P]

But Kuramochi said he thought the Toyota recall issue had
largely faded as a factor for the market.

Chip gear manufacturer Tokyo Electron (8035.T: ) and other
tech shares gained after the Intel results, with Tokyo Electron
shares climbing 4.1 percent to 5,110 yen.

Chip-tester maker Advantest Corp (6857.T: ) shot up 5.7
percent to 2,013 yen, and Nikon (7731.T: ), a maker of steppers,
advanced 2.1 percent to 1,644 yen.

Komatsu gained 5.4 percent to 1,790 yen.

Another high-powered performer was Mizuho Financial Group
(8411.T: ), which rose 3 percent to 139 yen after the banking
group set the price of its new shares for public offering on
Tuesday. [ID:nTOE66C06H]

A strategist at a Japanese brokerage said short-covering is
expected to continue supporting the stock in the near term, as
speculators had shorted the shares ahead of the price-fixing, in
anticipation of sell-offs by some investors who had hoped for a
low price for the new stock.
(Reporting by Elaine Lies; Editing by Joseph Radford)

Nikkei powers up on Intel, shoots above resistance