Nikkei 225 closes at two-week high as bullish trend resumes and tech sector leads rally
Nikkei 225 bounces off support to close near 39,901 as bullish structure holds
The Nikkei 225 rose 0.6% on Thursday to close at 39,900.97, its highest level in two weeks, as investors responded positively to Wall Street’s overnight gains and easing concerns around U.S. Federal Reserve leadership. The rally was further reinforced by a decisive technical bounce from a key support zone, suggesting continued momentum within the broader uptrend.
Highlights
- Nikkei 225 closes at 39,901, its highest in two weeks, up 0.6%
- Bullish breakout confirmed on multiple timeframes with RSI at 62.14
- Tech stocks lead rally while exports to EU and ASEAN cushion trade concerns
The Nikkei 225 continues to move within a rising channel structure that has defined the index since its March rebound. Thursday’s session saw the index bounce firmly off short-term support near 39,400, following a brief dip below the channel midline. The price recovery to the upper half of the channel signals that buyers are still in control of the trend.
Nikkei 225 index forecast (Source: TradingView)
Technically, the index is well-supported by upward-sloping exponential moving averages. The 20 EMA at 39,430, the 50 EMA at 38,615, and the 100 EMA at 38,111 all support the bullish structure. The RSI at 62.14 remains below overbought levels, indicating potential room for further gains. On the 30-minute chart, the Nikkei broke above a short-term descending channel, confirming a bullish breakout that complements the daily trend.Momentum indicators strengthen the outlook. The MACD crossed into bullish territory, while the Vortex Indicator (VI) shows positive trend dominance, adding weight to the case for continued upside.
Tech outperforms as Japan trade data supports sentiment
Gains in the technology sector helped lift the broader market. Sumco surged 7.0%, Socionext rose 6.4%, and CyberAgent gained 5.1%. NEC Corp added 4.3%, and LY Corp climbed 3.6%. The broader Topix index rose 0.7% to 2,840, recovering from early session weakness.
While Japan’s trade data showed falling exports to the U.S. and China, exports to the EU, ASEAN, and Russia provided a cushion. Investor sentiment was further supported by new U.S. trade agreements with Vietnam and Indonesia. However, Seven & i Holdings tumbled 9.2% after Alimentation Couche-Tard withdrew its $47 billion bid for the company.
Forecast: Nikkei eyes 41,000 if support at 39,400 holds
If the Nikkei continues to hold above 39,400, a move toward 41,000, the upper boundary of the ascending channel, remains likely representing a 2.75% upside from current levels. A decisive close below 39,000 would signal potential trend exhaustion. Technical momentum, rising EMAs, and sector rotation into tech, support the view that buyers remain active heading into late July.
In prior updates, we emphasized the importance of the channel’s midline and the 39,400 support zone. The July 17 rebound confirms the strength of this level, validating our bullish thesis. With both trend structure and momentum aligned, the Nikkei’s breakout from intraday consolidation reinforces the broader bullish narrative.
