* Gree surges to 10-month high on Goldman Sachs upgrade
* Mixi untraded with glut of sell orders
* Investors sell large caps while awaiting Fed signs - analysts
TOKYO, Dec 11 (Reuters) - Japan's Nikkei share average dropped for a second day on Wednesday, which traders said stemmed from hedge funds unwinding positions in risky assets while waiting to see if the U.S. Federal Reserve tapers its stimulus soon. Bucking the weakness, internet gaming firm Gree Inc surged 20 percent and was the most traded stock by turnover and was the biggest percentage gainer after Goldman Sachs upgraded its rating to 'neutral' from 'sell'. The Nikkei dropped 0.4 percent to 15,542.59 in mid-morning trade after shedding 0.3 percent on Tuesday. On Monday, it rallied 2.3 percent, its best one-day gain in three months, spurred by a slide in the yen after an upbeat U.S. jobs report raised expectations the Fed next week could begin trimming stimulus. The Topix fell 0.3 percent to 1,252.94. Traders also said that although there are concerns about overbought signs in the market, the Nikkei should be supported at 15,000, which is the strike price of 17,000 put option contracts seen in the market ahead of the Nikkei 225 futures and options settlement on Friday. "People are not taking new positions. They are unloading what has been popular recently," said Yoshiyuki Kondo, an analyst at Daiwa Securities, adding that investors are selling large cap stocks including some exporters and domestic-demand sensitive shares such as financials until more cues on when the Fed will tapering its stimulus. Toyota Motor Corp shed 0.6 percent, Honda Motor Co dropped 0.5 percent and Mitsubishi UFJ Financial Group fell 0.8 percent. On Wednesday, Gree soared to a 10-month high, extending its Tuesday's 15 percent gain driven by a rally in internet-related stock peer Mixi Inc after its recently launched "Monster Strike" mobile game gained popularity. Mixi was untraded with a glut of sell orders at 7,560 yen, indicating a 17 percent drop from the previous day's close of 9,060 yen after Goldman Sachs cut its rating to 'sell' from 'neutral'. "Mixi is trading way above its fundamentals, so selling greatly makes sense," a fund manager at a Japanese asset management firm said.