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Charts Predict: Stocks' Rally Won't Last into May

The rally in European stock markets is probably halfway through and it is not likely to last past April into May, Robin Griffiths, technical strategist at Cazenove Capital told CNBC.

When analyzing the chart for the Xetra DAX index, he suggests the German index has another 20 percent higher to go, then will fall back again.

"It is only a bear market rally. None of the ingredients for the recent low to be the final low of the bear market were in place," Griffiths said.

Barclays shares hit a low below 60 pence at the end of January 2009, then hit another low below 60 pence at the beginning of March 2009.

The recent bear-market rally has taken the bank's stock to over 170 pence a share.

"It's the very fact that these are the sorts of franchises that were rallying, which aren't really the ones that are going to take the markets up into a new bull market," Griffiths said of Barclays.

Giffiths noted that UK housebuilders like Persimmon had similar rallies to Barclays.

He said it was "the bombed out, utterly depressed sectors that have had the rally", not the so-called quality defensives — utilities, pharmaceuticals.

"Their charts quite frankly look horrendous and indicate we're still in a bear market," he added.

Sterling rose above $1.4900 versus the dollar on Monday, its highest in two months.

"It did about a week ago briefly go under $1.40, which is really negative. Had it confirmed a break below $1.40, sterling would be in dire straits. It's now rallied back to just below the mean of the last 10 years, which is about $1.50-$1.52. So it's rallied back well into the range and it might equally probably go towards the top end of the range, near $1.60," Griffiths predicted.

"The important signal is not that it's going up, it's that it's stopped going down," he added.

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