The FTSE-100 is being buffeted in a tight trading range as investors wrestle with the competing emotions of fear and greed, and those tempted to buy the UK index should wait for a break above the 4,657 level, Sandy Jadeja, chief market strategist at ODL Securities, told CNBC.
Meanwhile, those hoping for another gold rush should wait for the green light, according to Jadeja.
“We want to see a break out either on the upside, where the bulls are going to come in (or) towards the downside, (where) it looks like the markets are going to head much lower,” Jadeja said.
The FTSE would have to rise above 4,657 to confirm an imminent rally in the index and a fall below 3,935 would signal steep declines to come, according to Jadeja.
“The FTSE itself, after a 31 percent decline in 2008, is now going through a consolidation pattern. All that really means is that we’re going to find a period of indecision,” Jadeja said.
“What we’re looking at is the emotions really of fear and greed … it’s all included in the price,” he said.
Watch the video above for Jadeja's 101 of technical analysis.
Wait for Gold ‘Green Light’
Investors looking to buy into gold should wait for the “green light” of prices rising past the key resistance level of $937 per ounce, Jadeja told CNBC.
“The $937 price is where there was resistance back in October. Gold reached that level, fell back, we’re now back at that level again and it’s struggling to break above there,” he said.
“Is it a good buy? I don’t think so. Unless it breaks out on the upside,” he added.
Gold has been a better performer than the FTSE since the lows of October, Jadeja points out, but investors need to wait for the signal before expecting further gains.
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