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Double Bottom Signals Nikkei 225 May Advance

Japan’s Nikkei 225 Stock Average, the developed world’s worst-performing benchmark index since July 1, may rally to 10,000 if it completes the formation of a so-called double bottom pattern, according to analysis by Mitsubishi UFJ Morgan Stanley Securities Co.

To form the chart pattern, the benchmark gauge needs to advance to 9,136.02, equaling a July 4 high between intraday lows on June 4 and July 25, said Naohiko Miyata, chief technical analyst at Mitsubishi UFJ Morgan Stanley. From there it will advance toward 9,500, a level representing a 62 percent Fibonacci retracement of the gap between the March 27 intraday high and the lowest point during trading on June 4, he said.