Investors want to buy the market, but they're getting "a little bit cagey about their bets," so they are moving away from the high beta stocks and moving back into defensives, Geoff Wilkinson, head of investment research at Mint Equities, said Wednesday.
But if European basic resources can close above 390 on the DJ Stoxx Basic Resource index, you will know the bulls are back in charge and we're out of the defensive rotation and investors should go back into high beta stocks, Wilkinson told CNBC.
The defensives, like the health-care sector, do offer investors, who missed the last rally, a "very satisfactory route to buying into this market," Wilkinson said.
"The defensives are there to be bought," he added.
When looking at the chart for the FTSE 100 index, it is "exceptionally well supported," Wilkinson said.
"What you're starting to see now is a little bit of money coming off the table," he said. "We've broken to new highs — that's very, very positive."
If the FTSE falls below 4,500, it is likely to trade lower towards 4,350, Wilkinson said. But that's a big 'if', otherwise the index is likely to continue upwards, he added.