Nikkei 225 futures price inched up to 39

Nikkei 225 futures price inched up to 39,010, with gains led by auto and electronics stocks. The technical setup hints at a potential rally extension toward the 39,200 resistance level. Economic data released on Monday showed that U.S. pending home sales climbed +4.0% m/m in August, stronger than expectations of +0.2% m/m and the biggest increase in 5 months. If one holds a bullish view of Nikkei 225 index, one could consider taking a long position in Nikkei 225 futures at the current price of 42,000, with a stop-loss below 39,600, a hypothetical maximum loss of 42,000 – 39,600 = 2,400 points if the breakout fails to materialize. Looking at Figure 2, if the breakout of the overhead resistance is confirmed, Nikkei 225 index has the potential to reach 46,000, resulting in 46,000 – 42,000 = 4,000 points. Each point move of the Nikkei 225 futures contract is 500 JPY. Micro Nikkei futures contract is also available at 1/10 of the standard contract size. Trading at 38,980, the Nikkei 225 futures price is benefiting from a weaker yen, easing pressure on exporters. Soft commodity prices have also reduced input costs for Japanese manufacturers, aiding investor sentiment.