By Michael Patterson
Oct. 9 (Bloomberg) -- Russia’s Micex Index surged yesterday above the halfway point between its all-time high and its bear- market bottom, a signal shares may climb another 27 percent, according to Auerbach Grayson & Co.
The Micex advanced 4.3 percent to 1,278.53, closing above the level midway between its December 2007 peak and its October 2008 low for the first time.
The midpoint is a key level for Fibonacci analysts, who use a system pioneered by 13th century mathematician Leonardo Pisano that discerns ratios from proportions found in nature. To adherents, the performance of an index when it approaches the 50 percent “retracement” level can be used to forecast whether it will keep climbing or retreat.
“The completion of the 50 percent retracement is very bullish,” Richard Ross, Auerbach’s New York-based global technical strategist, said in a phone interview. “It lends credence to the Micex’s breakout” above its previous 2009 high in June, he said.
The next “logical target” for the Micex is the 61.8 percent retracement level, a 10 percent advance from yesterday’s closing level, according to Ross. There’s a “good chance” the 30-company gauge may extend its rally to the 76.4 percent retracement level, a 27 percent gain from yesterday’s close, he said.
To contact the reporter on this story: Michael Patterson in London at mpatterson10@bloomberg.net.
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