The U.K.’s benchmark FTSE 100 Index (UKX), which is trading near the highest since May 2008, will rally as much as 7.8 percent by mid-February, according to a technical analyst at Credit Suisse Group AG.
The gauge will rise as high as 6,600, which is a point on a trend line connecting the peaks reached at the end of 1999 and several times in 2007, David Sneddon, head of technical analysis research at Credit Suisse in London, said in a telephone interview. The measure last week surged above its 2011 weekly high, showing a bullish signal, he said.
“We’re still above the 2011 peak this morning,” Sneddon said. “There was already a bullish setup for the FTSE, so that’s been reinforced by breaking through this 2011 high.”
The FTSE 100 was little changed at 6,121.28 at 2:41 p.m. in London, trading near its highest level since May 2008. The gauge has added 3.8 percent since the New Year after U.S. lawmakers announced a compromise budget.
U.K. stocks rose 5.8 percent in 2012, trailing all European markets except Spain and Portugal.
Sneddon said the FTSE 100 must first break above 6,376-6,396 range last seen in 2008 if it is to make further gains.
“It will be interesting to see whether the market can sustain this immediate break higher,” he said. “We are bullish on the medium-term, and at the moment it does look good.”
In technical analysis, investors and analysts study charts of price, volume and other trading data to predict changes in a security, commodity, currency or index.
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