Waves, Patterns & Projections (2004)

I notice JP Morgan has concurred with SG Securities (and presumably others) about the prospects for Oil stocks with a seemingly dismissive valuation target of c525p for BP........whilst one cannot trust the fraternity as far as one could throw them, this might not be such a bad call as it seems bearing in mind that FTSE is, presumably, fast approaching a corrective period of c(09.00%) and some BIG berries will inevitably fall off the soon to be withering christmas tree.

As ever, it will be the big 5 sectors that dictate the fate of FTSE i.e. Oil, Banks, Pharmies, Telecoms and Miners. FWIW, my view is that Oil will indeed suffer the most with Resources a clear second best (or worst depending on how one looks at it). Banks will also slide but probably have further, good medium-term upside once the correction has abated. Pharmies and Telecoms may offer a degree of relative support and I remain of the view that VOD in the 120s will end up being a sound longer term Buy.

I now suspect FTSE will hold its form through to the first few days of the new year (at some point during the hols reaching a Phase top of c5632) and then enter the multi-wave correction which should last through Q1 2006 and probably into Q2 2006 before resuming its upward trajectory reaching 6000 later in the year.