|Written by GSCR Staff|
|Wednesday, 19 December 2012 10:01|
The Nikkei 225, or Japan’s market index, has been on a steady rise since a valley of 8,365 in late July to currently approaching 10,200 today. Recently, there was an election and Japan’s LDP (Liberal Democratic Party) held on to a majority with an applied mandate to continue government spending and fiscal easing. While we think these policies are bad for Japan’s economy in the long-term, and in essence, a major contributor to Japan’s two ‘lost decades’, this may signal a time to buy for a short-term pop in the Japanese stock market.
A great play is the iShares MCSI Index ETF (NASDAQ – EWJ - $9.52) in our price range. EWJ has also enjoyed a steady rise from a valley of $8.75 in late July to the $9.50 range. The fund tracks the MSCI Japan Index and has some major holdings in Honda, Mizuho, and Fanuc as an example. Both short-term and long-term technical analysis illustrate very bullish support for the ETF. We believe a rise up or even past the $10.21 52-week high is possible in the next few weeks.
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
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