The rally continues for the Nikkei index

Naeem Aslam Zaye Capital Markets

Asian markets

Evergrande Group is China's second biggest property developer in terms of sales and the world's 122nd largest group in terms of revenue. Retail investors and homebuyers are putting pressure on the company, fearing that it will go bankrupt. All such allegations have been refuted by Evergrande. Despite its difficulties, the company is doing everything it can to meet its obligations and work for the betterment of its customers. According to reports, police were called to the company's headquarters in Shenzhen yesterday after a crowd gathered to demand overdue repayments.

Investors should monitor the situation closely to infer if any similar cases arise in China amid the country’s regulatory crackdowns. As of 11:12 p.m. EST, the Nikkei jumped 0.38% while the Shanghai Composite Index surged 0.15%. The ASX 200 index declined 0.41% and Seoul's Kospi rose 0.91%. The Hang Seng index, in Hong Kong, hopped 0.04%.

The Nikkei stock index has entered a solid area of resistance on the daily time frame as shown in the chart below. Looking at the price action, there is no doubt that the price is way bought as well and this is because the RSI has entered an area of 70. It is highly likely that we may see the Nikkei index falling towards 29,373 price mark as that is where the initial support level is.

Author

Naeem Aslam

Zaye Capital Markets

Based in London, Naeem Aslam is the co-founder of CompareBroker.io and is well-known on financial TV with regular contributions on Bloomberg, CNBC, BBC, Fox Business, France24, Sky News, Al Jazeera and many other tier-one media across the globe.

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