Welcome to the 4th leg of this un-ending journey of stock exploration, which had commenced in the bleak market year of 2002. March 2003 saw the FTSE bottoming up at 3300. By the end of that year, 2003, the FTSE had hit 4477 representing a rise of 36% on the year. On the last trading day of the year 2004 the FTSE stood at 4814, representing a rise of 7.5% on year 2003.
Against the background of the prediction of the profits of doom and gloom, some of whom had predicted a collapse of this market citing criteria many decades old, the performance this year must rank as an encouraging one. The more level observers had predicted the market to go sideways for this year and their prediction has proved to be the right one, even slightly exceeded. The sectors for the year 2004 have broadly followed that of the market as a whole. Accordingly, individual stock picking proved the deciding factor between loosing and winning.
For this year 2005, my prediction is for a market acting in a manner not too dissimilar to that of last year. So again, the emphasis should revolve around individual stock picking. Trading a ranging market is far more difficult than trading a trending market. Timing becomes critical, and with this in mind more reliance has to be placed on the use of indicators to fine hone timing
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