Japanese Economy

Japan Penny Stocks – Japanese Economy Shakin’ by Quake

Monday was a prime example of why both long term investors and traders need lists of stocks. Most Japanese ADR’s which trade on the NYSE traded higher today based on the eased sentiment from the nuclear crisis. Smart money came in to these Japanese ADR’s and ETF’s late on Friday buying weakness and figuring the situation wouldn’t get much worse.

Despite the Nikkei being closed today stocks like Nomura (NMR:NYSE), Sony (SNE:NYSE), Toyota Motor (TM:NYSE) and Hitachi (HIT:NYSE) all closed up over 2 percent today. Even Honda Motor, which was a favorite short selling play last week ,rallied over 1.3 percent.

Is this a relief rally ? Maybe. Can this new bullish sentiment change tomorrow ? Yes. However, if the situation changes for the better in Japan, the bottom line is that investors bought some cheap stock in the past few sessions. Remember, even the best penny stocks to buy have down days, even if they were rising stocks the week or month before. The reason for the prior hot penny stocks analogy is to point out that the Japanese economy is and will still be volatile in the near future.

For now a good approach to investing in Japanese ADR’s is to have the foresight and liquidity to stay in. Scaling into positions with the intention of averaging down is something that both large cap and penny stock traders do every day. For instance, if you like Toyota’s stock price and long term prosects may warrant a purchase while the stock is in the low to mid eighties. So why wouldn’t you buy more if it dipped to the high seventies if fundamentals and nuclear situation didn’t change for the worse.

While there is risk in Japan, there is much more liquidity in these names than in many high fliers mentioned on CNBC and much more than most penny stocks. So once again, prepare your list of stocks. There are several other quality Japanese companies aside from those mentioned above. Remember, many of these fallen angels were rising stocks that many institutions wanted to own just a few weeks ago. So now just might be the chance to “buy the dip and sell the rip”. Stocks on the rise are out there every day, you just have to work to find them.

Keep an eye on this adr list of Japanese stocks.