Japan’s Nikkei 225 Stock Average may surpass 10,300 after its chart formed a so-called double bottom, according to Mizuho Securities Co.
The Nikkei 225 fell to as low as 9,395.29 on May 27 and rebounded to as high as 9,962.42 on June 4 before sliding to 9,378.23 on June 9. As the average exceeded the June 4 high today, it formed a double bottom, suggesting a further advance, said Yutaka Miura, a senior technical analyst at Tokyo-based Mizuho.
“This double bottom is unusually clear and should be fairly valid,” he said. “For the Nikkei, 10,000 is a psychological resistance line. After exceeding that level, the average is gaining upward momentum and we can expect it to reach the 200-day moving average.”
The Nikkei 225, whose 200-day moving average is 10,305, jumped 1.6 percent to 10,041.80 as of 12:30 p.m. in Tokyo today.
The double-bottom form appeared between February and March. After the form was completed on March 8, the Nikkei 225 climbed 7.1 percent to this year’s high of 11,339.30 on April 5.