REFILE-Nikkei surges past resistance, gains 2.8 pct on Intel

(In final paragraph corrects Komatsu profit growth forecast to
14 percent instead of “nearly a quarter”. The same error appeared
in earlier reports)

* Nikkei above resistance at level of 25-day moving average

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

* Selling of futures around 9,800 to cap gains – analyst

* Toyota, other automakers gain, weak yen boost likely

* Nikkei on target for biggest one-day gain since June 3

By Elaine Lies

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

In active trade, the benchmark climbed well past resistance
at around 9,677, the level of its 25-day moving average, which it
broke above for the first time in three weeks.

Resilient demand for personal computers and servers helped
Intel Corp (INTC.O: )’s margin and revenue forecasts, out after the
bell, 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.”

The benchmark Nikkei (.N225: ) surged 2.8 percent or 270.13
points to 9,807.36, while the broader Topix (.TOPX: ) gained 2.3
percent to 874.19.

Market players said short-covering emerged after the Nikkei
broke above its moving average and additional resistance on its
daily Ichimoku charts at around 9,670 which was its kijun sen, an
indicator of medium-term trends. Ichimoku charts are a popular
charting method among Japanese traders.

The Nikkei also broke above the middle line of its Bollinger
Bands, around 9,643, after being stuck below it for the past
several trading days, while its MACD continued to rise.

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 4.6 percent to 3,270 yen and Honda Motor (7267.T: )
climbing 4.3 percent to 2,753 yen and the gains were seen as
mainly due to a slightly weaker yen the boost in overall
sentiment.

An analysis of dozens of data recorders from Toyota vehicles
involved in accidents blamed on sudden acceleration suggests
some drivers were at fault, according to the Wall Street Journal.
[ID:nN1396064] 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 3.9 percent to 5,100 yen.

Chip-tester maker Advantest Corp (6857.T: ) shot up 5.5 percent
to 2,010 yen, and Nikon (7731.T: ), a maker of steppers, advanced
2.1 percent to 1,644 yen.

Shares of Komatsu (6301.T: ), the world’s No.2 construction
machinery maker, shot up 6 percent to 1,799 yen after it lifted
its full-year profit 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]

REFILE-Nikkei surges past resistance, gains 2.8 pct on Intel