According to the Senior Market Strategist of BBSP SAS, a research company, Jean-Charles Gand, the Nikkei 225 Stock Average of Japan may rebound if it closes lower than the figures of the last 4 sessions. This pattern would signal a rally starting within the next 4 days and while announcing this analysis, Gand cited indicators developed by Tom DeMark of the Market Studies LLC. On today, the Nikkei declined by 3.7% and the same is currently at 13,261.82. This marks the lowest value for the gauge since 18th April. Only 4 days ago, the measure closed at 14,311.98 and hence, it needs to jump a minimum of 7.9% for stopping the so called TD Buy Setup Pattern to get triggered, as far as comments made by Gand. After experiencing its highest value on 22nd May, the gauge of the Japanese stocks declined by 15%.
According to Gand, a cycle of gains ended in last month and now the market has engaged in a three-wave correction. Gand added that as far as the month of June is concerned, the outlook should be neutral on the Nikkei. However, in the long term basis, the rating should be of buy status.
Gand added that a rebound would mark the start of an advancing phase and the same would be followed by a series of losses. The Nikkei may fall down below the support level of 13,145 right on this month, as mentioned by Gand. The level of 13,145 represents the 38.2% Fibonacci retracement of the move from the low in November to the high of last month.
On 3rd October, 2011, Gand used DeMark indicators to predict that the benchmark gauge of US stocks, Standard & Poor’s 500 Index would increase by 20%-30% before it would resume the losses. Through 2nd April, 2012, the benchmark gauge for US shares increased by 29%.
Among the major developed markets, Japanese equities are still the best in the current year. The Topix Index and Nikkei both have surged ahead by more than 27% in this year. Shares actually started to rally right from November, 2012 as there were speculations that the measurements taken by the Prime Minister, Shinzo Abe and the Bank of Japan will be helping to come over the deflation that the country has been experiencing for the last 15 years.