FTSE’s Turn to 6000

<p>If you’re new to this column, then you may not be familiar with our recurring fundamental and technical arguments in favour of the FTSE-100 and […]</p>

If you’re new to this column, then you may not be familiar with our recurring fundamental and technical arguments in favour of the FTSE-100 and our insistence that it will reach the 6000 mark before the end of the year.

The arguments were laid out on November 30October 25 and on August 10.

Aside from the FTSE-100′s uniquely successful track record in December (rallied in each of the last nine Decembers), the index continues to show robust technicals despite having attained the feat of posting seven consecutive monthly gains.

Both weekly and monthly charts indicate a rate bullish convergence in multi-speed stochastics, while the May 2011 trendline appears on the verge of being broken. Remarkably, despite the seven straight rallying months, the Index has yet to regain its highs for the year attained in March at 5989.

The index is notorious for securing those December gains in the second half of the month. The unavoidable extension of the US Fiscal Cliff into Q2, a successful buyback program in for Greek bonds, the renewal of asset purchases by the Fed and a pro-asset purchases PM in Japan comprise the ingredients for an exogenous rally in the FTSE-100.

The four-week rally appears on its way, finally clawing its way onto the 6,000 level. And if the Golden Cross on the 55-WMA exceeding the 100-WMA is to be heeded, then 6,370 is a realistic target for late Q1.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.