[Free Release] This Week's Japanese Stock Swing Trading Strategy (Week of June 9, 2025)

Introduction: Why Individual Investors Need an 'Analytical Model' Now

The evolution of AI has brought us a sea of information. However, that vast ocean sometimes lures us into a loss of direction. Fragmented breaking news, market noise amplified by social media, and expert opinions with weak foundations. In this flood of information, it is extremely dangerous for individual investors to navigate without a compass.

The purpose of this article is not simply to present 'stocks to watch this week.' It is to utilize AI as a 'sparring partner to deepen thinking' and to reveal for the first time the full picture of the reproducible and systematic '5-Step Analysis Strategy' that I practice every week, along with its thought process.

Through this article, readers can gain the following two things:

1. A 'thinking framework' for reproducible market analysis

2. 'Specific trading strategies for this week (thought experiments)' derived from that framework

This aims to be an aid for you to sharpen your own 'analytical weapons' and ride the waves of information.

My Investment Philosophy: The Full Picture of the 5-Step Analysis Framework

The strategy I adopt consists of the following five steps. This process is a blueprint for making decisions with consistent logic, from the macro market environment to micro entry timing.

• Step 1: Market Sentiment Analysis (Reading the Market Weather) Analyze the overall market trend, investor sentiment, and supply-demand dynamics to determine whether the current market is bullish, bearish, or in a directionless range. This determines the basic strategy weight for buying and short selling.

• Step 2: Sector Analysis (Selecting the Battlefield with an Edge) Based on the market sentiment analysis, identify sectors that are relatively strong (or weak) compared to the overall market. Considering the macro environment and themes, select the 'battlefield' where capital is likely to flow in (or out) in the short term.

• Step 3: Company Identification (Narrowing Down Targets with Catalysts) From the selected sectors, list multiple specific companies that have triggers (catalysts) for short-term price movements, such as financial results or share buybacks. The key here is to identify significant changes in fundamentals.

• Step 4: Technical and Supply-Demand Analysis (Judging the Opportunity) Perform technical analysis on the listed companies, such as chart patterns, moving averages, and oscillator indicators, as well as supply-demand analysis such as margin trading balances. This helps determine the optimal timing for 'when to enter' and narrows down the stocks.

• Step 5: Trading Plan Formulation (Verbalizing the Strategy) Finally, create a detailed 'trading plan' for the carefully selected stocks, including specific entry prices, profit-taking targets, and stop-loss lines. This is the final step to eliminate emotions and execute disciplined trades.

Previous Trade Simulation Results and Reflections (May 26 - June 3, 2025)

Strategy evolves by always learning from past successes and failures. First, I will share the results of the previous trade simulation with transparency and extract lessons to apply to this week's analysis.

• Total Profit/Loss: +60,700 yen

  • Winning Trades (Profit Taking): Tokio Marine HD (+45,700 yen), Mitsui Mining & Smelting (+22,700 yen)

  • Losing Trades (Stop Loss/Unrealized Loss): MS&AD (-6,000 yen), Sumiseki HD (-1,700 yen)

• Summary: Although the win rate was 50%, by trading with risk-reward in mind, I was able to secure a sufficient total profit.

Shoji's Perspective: 3 Important Lessons Learned from This Trade

1. Re-recognizing the Difficulty of Short Strategies and the Risk of Reversal: The short sale of MS&AD misjudged the strength of actual demand from share buybacks, leading to an immediate stop loss. Sumiseki HD also did not decline despite expectations for high volatility.Short selling based solely on simple indicators like 'deteriorating credit ratio' or 'high volatility' is dangerous, and I keenly felt the need to make comprehensive judgments based on short-term themes and signs of shifts in supply and demand.

2. Effectiveness of Event-Driven Trading: Tokio Marine HD, which yielded the largest profit, saw its stock price pushed up by a clear event: the strengthening of shareholder returns.I will continue to prioritize monitoring stocks that have events that move supply and demand, such as 'financial results, dividend increases, and share buybacks'.

3. Flexibility in Profit Taking: Although Mitsui Mining & Smelting reached its first target, it did not reach the final target. When a strong trend is present, I should have had the flexibility in my strategy to extend profits, such as 'partial profit taking + trailing stop for the remainder' instead of rushing to close the entire position.

Based on these reflections, I will proceed with this week's analysis.

This Week's Japanese Stock Swing Trading Strategy (Week of June 9, 2025)

From here on, I will explain this week's specific analysis and strategy following the 5-step framework mentioned above.

[Steps 1 & 2] Market Environment Analysis and Focus Sectors

• Market Sentiment: The "directionless range-bound market" continues

  1. • Reason 1 (Technical): The Nikkei 225's 25-day moving average is almost flat, indicating a lack of short-term direction.

     • Reason 2 (Supply and Demand): Foreign investors have been net buyers for 9 consecutive weeks, supporting the market, while individual investors have been net sellers for 8 consecutive weeks, showing mixed supply and demand.

     • Reason 3 (Events): With the G7 Summit and monetary policy meetings in Japan, the US, and Europe approaching, there is a strong wait-and-see mood.

     • Conclusion: Therefore, the basic strategy is to maintain a neutral stance of "50% long, 50% short."

• Focus Sectors:

  • Buy Recommendation: Construction, Machinery

    • Construction shows strong expectations for profitability improvement due to solid domestic demand and the passing on of rising material costs.

    • Machinery is attractive due to expectations for a recovery in domestic and international capital investment, as well as its inclusion of multiple growth themes such as semiconductors, automation, and defense.

  • Short Selling Recommendation: Textile Products

    • The stock price weakness stands out against the overall market, and it faces structural challenges such as cost-push pressure and difficulty in passing on costs.

[Steps 3, 4, 5] Specific Trading Plans and Analysis for 4 Carefully Selected Stocks

Based on the analysis above, I will present specific trading plans for the 4 stocks finally narrowed down.

1. [Buy Strategy] IHI (7013) - Upside Scenario Indicated by Multiple Catalysts

• Fundamental Catalyst Analysis:

  • Achieved a significant turnaround to a profit of 143.5 billion yen in the fiscal year ending March 2025.

  • It was revealed that BlackRock, one of the world's largest asset management companies, significantly increased its holding ratio to 6.19% as of June 4, 2025. This is a strong vote of confidence by professional investors.

• Technical and Supply/Demand Analysis:

  • The stock price has formed a clear upward trend and is above all major moving averages.

  • The margin trading ratio is 0.79x, indicating that short selling has accumulated. This is a supply and demand environment where buybacks are easily triggered when the stock price rises (short squeeze), which is likely to accelerate the rise.

• Trading Plan (Simulation):

2. [Buy Strategy] Komatsu (6301) - Massive Share Buyback Provides Support

• Fundamental Catalyst Analysis:

  • A large-scale share buyback of up to 100 billion yen (4.3% of total shares outstanding) is underway.

  • In May 2025 alone, approximately 16.6 billion yen worth has been actively repurchased confirming the company's strong commitment.

• Technical and Supply-Demand Analysis:

  • A "golden cross" has occurred, indicating a shift to a medium-term uptrend.

  • The margin trading ratio is neutral at 3.09x, but we expect actual demand buying from the share buyback to more than compensate for this and drive the supply-demand dynamic.

• Trading Plan (Simulation):

3. [Buy Strategy] Penta-Ocean Construction (1893) - Tug-of-War Between Shareholder Returns and Supply-Demand

• Fundamental Catalyst Analysis:

  • A share buyback of up to 5 billion yen has been announced.

  • For the fiscal year ending March 2026, significant profit growth is expected due to improvements in overseas operations, and there is also anticipation for a recovery in performance.

• Technical and Supply/Demand Analysis:

  • A short-term upward trend may be forming following the announcement of the share buyback.

  • The biggest concern is the loose supply/demand balance of an 11.81x loan-to-margin ratio.

• Trading Plan (Simulation):

4. [Short Selling Strategy] Nippon Koei (1887) - Dual Distortion in Performance and Supply/Demand

• Fundamental Catalyst Analysis:

  • A significant downward revision of the operating profit forecast for the fiscal year ending May 2025 by a massive 53%.

  • Despite the forecast for increased sales, the sharp decline in profit strongly impressed upon the market that there are structural issues, such as a lack of cost management capability.

• Technical and Supply-Demand Analysis:

  • The stock price has formed a clear downward trend, and major moving averages are acting as resistance.

  • The margin trading loan-to-value ratio is extremely high at 14.7x, indicating that the potential pressure for forced selling is very high.

• Trading Plan (Simulation):

Conclusion: The 'Strategic Perspective' Investors in the AI Era Should Possess

The four trading strategies explained in detail in this article, while having different backgrounds, share the same underlying philosophy. It is an approach of combining multiple independent data points (fundamentals, supply-demand, technicals, and macro trends) to construct a consistent logic (story) and identify high-edge trading opportunities.

This is not simply following the answers provided by AI. It is an investment style for a new era, where AI is utilized as a 'sparring partner' to verify one's own hypotheses, eliminate blind spots in thinking, and gain deeper insights.

I am convinced that possessing this reproducible analytical framework is the compass that will allow you to survive in the market long-term without drowning in the flood of information.

Future Operational Policy and Next Week's Report [Important Notice]

Thank you very much for reading my blog.

I have now fully disclosed my analytical methods and thought processes, but what did you think? Moving forward, I will be starting a new operational policy for this blog to provide deeper value to everyone and to make my activities sustainable.

Specifically, we plan to provide a "fully free version" and a "paid version" containing deeper analysis and additional information, on a rotating weekly basis or similar.

In the weeks of free release, as always, I intend to generously share high-quality information and thinking methods that serve as weapons for competing in the market, and to build a relationship of trust with all of you.

And, without further ado, I will be releasing the report for next week (the week of June 16, 2025) as our commemorative first "paid version."

In the next paid version, we plan to deliver even more in-depth content, such as:

• In-depth analysis of Komatsu (6301) and Penta-Ocean Construction (1893), which were touched upon in this summary

• A complete list of featured stocks adapted to the new market environment

• Detailed trading plans (thought experiments) for each stock.

Of course, we plan to release a "fully free version" again the following week, so please rest assured.

I hope this initiative will be an opportunity for higher-quality learning and discovery for all our readers.

(AI/DX Strategy Advisor Shoji)