The rally on the Dow Jones Transportation Index will fail and a long-term downturn can be expected for the index, Roelof van den Akker, chartist at ING Wholesale Banking said Tuesday.
Prices on the Dow Jones Transportation Index are "well above" the former bear-market lows of 2002 and 2003 around the 2,000 level, and this could be seen as a bullish divergence, according to van den Akker.
"But given the technical condition of the daily chart, we have to expect a downturn breakout instead of rising prices," he told CNBC.
Van den Akker says the index may break below the November lows of 2,950 toward 2,630, possibly even the 2,200 level.
This downturn would suggest the next selling opportunity within the index, he said.
On the currencies front, the euro may head lower against the yen, according to van den Akker.
"Last week, prices completed a short-term trading range below 118 (yen) and this was a consolidation pattern after the steep fall in prices from around 170 (yen) to the low around 115 (yen) in October," he said.
He sees the euro heading lower against the yen to 100 yen or even 92 yen and suggests investors take this sharp decline from 118 to 100 as a short-term selling opportunity.
Van den Akker also sees Germany's DAX index with a 4,135 support and a 4,800 resistance level.