December has failed to produce a significant rally for stocks, but the fact that they have held current levels bodes well for the New Year, Sandy Jadeja, technical analyst from ODL Securities, told CNBC.
Major stock indexes such as the Dow Jones Industrial Average and FTSE-100 are hovering near the same level as they were two weeks ago, but “the good thing is that the markets are holding support,” Jadeja said.
“The markets want to go higher, the technicals are indicating that at least. The next move should really be up,” he added.
(Watch the full interview with Sandy Jadeja, left)
The FTSE and Dow are struggling in a strict range as 2008 winds to a close, Jadeja said. And a break higher or lower could set the tone for the early part of next year, he added.
“On the FTSE, it’s really been struggling at the 4,445 level … we really do need to see a thrust above there,” he said.
If the FTSE falls below 4,200 points then lower prices are in store, but if it can rise above the 4,400 level then the UK index could rally to 5,000 in the first half of 2009, he said.
Nick Batsford, technical analyst from Hobart Capital, echoed the strategy and said: If the FTSE makes a sustained move above 4,400 it’s a buy, but if it slips below 3,750 then “good night and god bless.”
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