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Market Tips: Catch This Multi-Month Rally

CNBC.com
Monday, 8 Dec 2008 | 8:27 AM ET

Global stocks started the week in the green, with the Hang Seng index closing over 8 percent higher, on investors' optimism over a possible U.S. automakers bailout. CNBC's experts deem this rally to be a big one and for investors to get off the sidelines and get back into stocks.

Catch This Multi-Month Rally

Now may be a time to make a "long" trade, says Puru Saxena, money manager & CEO of Puru Saxena Wealth Management as he believes the markets are in a multi-month rally.

Gold Will Remain a Safe Haven

Gold Bars
AP
Gold Bars

Gold is still a safe-haven buy as the current financial turmoil will last at least until the second quarter of 2009, says Tetsuya Yoshii, vice president for derivative products at Mizuho Corporate Bank. He believes the metal will trade between $700-$800 an ounce in the near term.

Selling Pressure Easing

Selling pressure has eased in the market, notes Simon Godfrey, investment specialist at Fortis Investments. However, he tells CNBC that valuations are not sufficient enough to attract investors.

Risk Aversion Is Here to Stay

Risk aversion is likely to plague the markets for a few months, believes Mitul Kotecha, head of global FX strategy at Calyon. But if things improve in the short-term, it will play negatively for the dollar and the yen.

Sell into Year-End Rally: Strategist

Current stock rallies could be a good opportunity to sell stocks to "try and tidy up a scrappy 2008," Stephen Pope from Cantor Fitzgerald Europe told CNBC.

Treasurys Not Good Value: Chartist

People have panicked into US Treasurys as a safe haven, but current prices aren't good value for the public, Robin Griffiths from Cazenove Capital told CNBC.

Volatility High - Stay Wary

Stock market volatility remains at very high levels so investors should be wary of upswings in the market, Richard Cunningham from Alecto Financial told CNBC.

Stocks Rally on 'Pessimism Fatigue'

Construction worker in New York City.
Oliver Quillia for CNBC.com
Construction worker in New York City.

There is a sense of "pessimism fatigue" in the market, which could have helped stocks rally after evidence of a sharp rise in US unemployment, Lena Komileva from Tullett Prebon told CNBC.

Get into US Large Caps

The current rally will be a "short-term thing", according to Bernhard Langer, CIO at Invesco Asset Management. Langer is looking for oil to stabilize around the $35-$40 level for the present time.

"Large-cap U.S. stocks should do very fine and rally further," Langer told CNBC, adding that the S&P 500 index could rally toward 1,000.

He suggests investing in US blue-chip companies, with the exception of energy stocks.

Govt Measures for Good Infrastructure Plays

You're not going to get a lot from cash-on-deposit after the recent interest-rate cuts, so maybe it's worth, for a long-term objective, dipping back into stocks and looking for companies that might benefit from the government 'infrastructure' measures being introduced, Victoria Hoskins, regional investment director at Gerrard Barclays Wealth, said.

A Short-Term Bounce is Here

When looking at a chart for the Weekly S&P 500/T-Note Total Return Ratio, Riccardo Ronco, technical analyst at Friedman, Billings, Ramsey International noted that every week that goes by when the S&P continues to hold near 850 is a positive message for the markets.

"The selling pressure, the momentum of sellers, is wearing out, and this is a leading indication of something positive to come," Ronco told CNBC.

Focus on the names that failed to reach new lows in October and November, advises Ronco when looking at the Daily NASDAQ Composite with 52-week New Highs New Lows chart.

"Things that have gone down too much, on a 6 to 12 months basis, are usually those that are going to bounce faster into January and February."

The Asian, European and US telecommunications sectors are looking attractive at the moment, Ronco added.

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