Ashraf Laidi: FTSE’s Turn to 6000

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 30 http://www.cityindex.co.uk/market-analysis/market-news/2992772012/299277/, October 25 http://www.cityindex.co.uk/market-analysis/market-news/1253212012/uk-gdp-ftse-racing-to-the-bottom/ and on August 10 http://www.cityindex.co.uk/market-analysis/market-news/52792012/ftse-daily-weekly-monthly/.
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.