I have been nursing a big breakout theory on the Nikkei since it broke out in 2016. I have not held Japanese stocks for most of that time but have stayed aware of the potential of this long ago cast aside market. The target is 35000.
They say that the more times resistance is banged at the weaker it becomes. Nikkei may well have been on its way before the COVID-19 crisis came about…
…so what about maybe a little unfinished business?
I am currently holding EWJ in anticipation of this because it would relatively favor a strong Yen over the likes the hedged DXJ and HEWJ. Does the daily chart of the Yen look bearish to you? Me neither.
So I took the gamble and went currency un-hedged. EWJ gets a benefit from the strong local currency, whereas the hedged ETFs strip that out. If the Yen were to weaken but I remain bullish on Japan I’d consider adding one of the hedged ETFs.
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