Last year, five nuclear reactors restarted their operations in Japan. They were part of a group of reactors that had been closed soon after the 2011 nuclear disaster in Fukushima. Thus, the return of those reactors will change the proportions of the energy sources in Japan. According to the US Energy Information Association, the increased use of nuclear power will likely affect the share of fossil sources. Investors should try to reap the benefit from the current shifts in Japan’s energy sector and look for the best day trading stocks.
Day trading stocks affected by restarting the reactors
Back in 2011, the Fukushima accident changed the whole picture of Japan’s electricity production. In 2012, only one out of 54 nuclear reactors that had operated before the accident was still open. Local investigations discovered “a long history of nuclear power companies conspiring with governments to manipulate public opinion in favour of nuclear energy.” This affected the firms behind the nuke plants and those operating in the nuclear power market, with their shares recording significant losses to the point of total failure. At that time, the best day trading stocks listed on the Tokyo Stock Exchange (TSE) were related to companies producing liquefied natural gas (LNG) and other sources for electricity.
In the following years, the effect on the day trading stocks related to nuclear reactor operators was relevant beyond the Japanese borders. The negative sentiment around nuclear power in general became pronounced in Europe, the US, and other world regions. The so-called “nuclear power phase-out” trend started in the European Union, with countries like Germany, Belgium, and Switzerland shutting down their nuclear power plants. As of 2018, Italy was the only country in the world that had phased out its nuclear power completely.
However, even though the nuclear disaster happened in Japan, the country is ready to approve the restart of some nuclear reactors. This will put pressure on the LNG day trading stocks and will support companies that operate in the nuclear power industry. Under these circumstances, LNG imports are expected to fall by 10% this year.
Day trading stocks that can be profited from this event
Investors should look again for the best day trading stocks related to nuclear power companies because Japan doesn’t want to give up this important source for its electricity. A 2018 Reuters report concluded that we might see six more reactors restored in the next five years, with a long-term target of 30 nuclear plants operating by 2030. Nuclear operators pledged to spend a total of $36 billion on additional safety measures, like tsunami protection barriers, piping, fireproofing wiring, improved seismic resistance of the facility, and so on.
Some of the best day trading stocks to consider for long and short-term positions are Hitachi (T: 6501), Tokyo Electric Power Company Holdings Inc (Tepco) (T: 9501), and Toshiba (T: 6502). They are among the largest nuclear operators in Japan and have already demonstrated impressive gains for the last few months. There is enough room for more growth for these companies – in the range of 5%-15% by the end of this year. On the other side, natural gas companies, including Tokyo Gas, Osaka Gas, Toho Gas, Shizuoka Gas, and Hokkaido Gas might record significant losses, which should be a strong signal for short traders. The stock price of LNG companies shouldn’t drop more than 10% in the coming months, because they will still dominate the electricity market.
What makes related stocks a good option for a day trading
The current transformations in Japan’s energy sector should be interesting for day traders because they act as a strong impulse for higher intra-day volatility and higher trading volumes. This ensures a potentially greater profit and stronger signals.
However, before investing in Japan’s energy stocks, it’s essential to do your homework and analyze the market. There are many informative reports and news articles about these subjects. Also, you might improve your skills by attending a day trading academy that integrates a professional day trading chat room – this will help you get access to advanced traders who implement unique strategies.
Disclaimer: This content does not necessarily represent the views of IWB.