2004 Was a volatile year for the stock market, where the market moved between 4300 to 4600 for much of the year. The market ended the year at 4814, which represents a relatively poor gain of about 7.5%, Now for the good news ! - The FTSE ended the year near its highs with the bull market that began in March 2003, INTACT ! Which suggests more gains for the FTSE during 2005.

FTSE Outlook for 2005

The Market is clearly in an uptrend, a continuation of which at least suggests an upside target of 7.5% i.e. as per 2004, so 5176 as a minimum target. The Channel lines projected forward through-out 2005, suggest a market range by year end of between 5200 and 6000, therefore a mid channel peak suggests the FTSE is likely to hit 5600 at some point late during 2005, which would represent a 16% gain ! Another positive for the FTSE during 2005 is that years ending in 5's generally tend to be strong bullish years i.e. 1965, 1985, 1995, 2005. Support at 4600 and if breached 4280, which if breached would mark the end of the bull market.

In summary the target high for the FTSE in 2005 is 5600, as long as the key support of 4600 holds. If 4600 breaks than 4280 must hold for the bull market to stay intact.

Which Sectors to be in during 2005 ?

OILS !, With crude oil trading at $40 the Oil Majors are raking it in, with crude oil trading at $35 the oil majors are raking it in !. So you get the picture ;). Even if crude oil falls towards $35, (which is a major support zone), then the oil majors will still report large profits, which is not reflected in PE ratios ! They look like a strong one way bet ! i.e. the likes of BP and Shell etc..

Other sectors that look interesting are the far east namely Japan and India, which are probably best invested in through funds rather than individual stocks.

Nadeem Walayat

(c) MarketOracle.co.uk 2005

Disclaimer - This Trade Scenerio is provided for general information purposes only and you are reminded to seek independent professional advice before entering into any investments or trading positions.

The Market Oracle is a FREE Financial Markets Forecasting & Analysis online publication. We aim to cut through the noise cluttering traditional sources of market analysis and get to the key points of where the markets are at and where they are expected to move to next ! http://www.marketoracle.co.uk

This article maybe reproduced if reprinted in its entirety with links to http://www.marketoracle.co.uk

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.