The FTSE ended 2005 with the expected end of year rally, on a high note of 5619, and thus ensuring that the bull market is intact going into 2006 - Implying higher prices !
FTSE 100 Forecast for 2006

Technical Analysis
1. Support - A strong support zone has been created along the previous high of 5,500 which is likely to hold any short-term correction as we move into the new year..
2. MACD - (Bottom indicator) - The MACD is clearly moving into a tighter and tighter channel, which suggests a more volatile year and at some point a sharp break-out in price action, either up or down. But for the moment the MACD supports a rising market.
3. 40 week Moving Average - The moving average perfectly held the last correction in December, and is expected to hold any cor during 2006.
4. Uptrend Line - The uptrend line is another strong support indicator for the year, starting the year at 5075, some way from the current price.
5. Resistance Line - Currently the FTSE is trading at the resistance level, which suggests opening year weakness, as the uptrend line needs time to create more space for price action..
Target - The safest level to use for targeting a bull market is the mid channel line, currently at 5375, this projects to about 5975 by the end of 2006, which is below the expected strong resistance area of 6000. Thus at some point during 2006 the FTSE is expected to at LEAST trade to a high of 5975.

Nadeem Walayat

(c) MarketOracle.co.uk 2005
Disclaimer - This Trade Scenerio is provided for general information purposes only and not a solicitation or recommendation to enter into any market position, and you are reminded to seek independent professional advice before entering into any investments or trading positions.

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