(Bloomberg) -- Japan’s Nikkei 225 Stock Average may have ended its 19-year bear market in October, according to Mitsubishi UFJ Securities analysts who use so-called Fibonacci patterns to make forecasts.
The Nikkei retreated to 7,162.90 on Oct. 27, an 82 percent plunge from a record high reached in December 1989. This marked a “major turning point in Fibonacci terms,” Naohiko Miyata, Mitsubishi’s chief technical analyst, said in a report. The index might approach 10,000 by June, or 40 percent above the 26- year low reached on March 10, Tokyo-based Miyata wrote in a note distributed to clients yesterday.
Fibonacci analysts use a system pioneered by 13th century mathematician Leonardo Pisano, who discerned ratios from proportions found in nature. The analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. Passage through one level is a sign an index will keep moving to the next.
The Nikkei 225 declined 237.84 points, or 2.7 percent, to 8,595.01 yesterday, the biggest drop since March 30.
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