Shareswatch Australia

Australian stocks seem to be enjoying a broad rally today and I suspect the mainstream financial media will churn out bullish sounding headlines when the market closes.  But if we step back and review a few charts it’s pretty clear that the Australian stock market is stuck in a rut and I don’t see it breaking free any time soon.

So far this year the Australian stock market had managed to edge slowly upwards and the All Ordinaries Index appears poised to settle above 4400 during the next week or so. Although the risks of a major Eurozone economic implosion appear to be fading, the signs are that the economy in China continues to slow and it appears the U.S. economy is still struggling. The situation in China in particular is likely to have a major impact on where the Australian stock market heads next over the following few months.

So far 2011 has not been a good year for the Australian stock market despite the ASX All Ordinaries  & S&P/ASX 200 flirting with the 5000 points level earlier in the year.  Over recent months the market has fallen back into bear market territory so a review at this stage of some 52 week stock price highs & low may give us an insight into how the market is tracking.

An overdue stock market correction is currently working it’s way across global markets and as usual spooked investors have been selling out of the financials and mining stocks in Australia.  Once again this illustrates just how feeble the ASX All Ords and ASX 200 are and how dangerously unbalanced the Australian economy is.  But is the current correction anything out of the ordinary?

Well today the stock market correction that I mentioned was coming in February has certainly hit and the ASX All Ordinaries Index has fallen below the 5000 level yet again.  Is this latest share market correction something Australian stock market investors should worry about, or is it simply an over-reaction to global events which will have little long term impact on stocks and shares?

After some promising gains in the first part of 2010 the Australian stock market closed down today to finish the year basically unchanged. In plain English the share market essentially did nothing in 2010 and so if the Australian economy is really booming, then this is not being reflected in the performance of the ASX All Ordinaries or S&P/ASX 200.

If you are confused about the conflicting  reports regarding the Australian economy and outlook for the stock market you are not alone.  Much of this confusion is caused by financial journalists who one day are talking about a double dip recession and then suddenly switch to chirping about a robust Australian economy once some positive economic data appears.

Today the Australian stock market is slipping back towards 4500 as once again investors are becoming concerned that the feeble global economic recovery is faltering. But rather than focus on the short term movement of the stock market let’s once again look at the 52 week share prices of some commonly held Australian stocks.

As the Australian ASX All Ordinaries Index slowly crawls towards the 5000 level again, now is a good time to look at how some stocks have come through the global financial crisis. Does it look like a global recovery has finally taken hold, and is the Australia stock market poised to surge higher over the next few weeks?

It has been a while since I have looked at the 52 week prices for some widely held ASX stocks, but now that the stock market has taken a bit of a tumble over the last week or so it seems like a pretty good time to have a look at them again. Have stocks hit new lows or have we simply seen some heat taken out of the market?

Now that it appears we are in the midst of the long awaited stock market correction it seems an ideal time to check how the 52 week stock prices have been tracking for a number of ASX listed stocks as this may tell us if the rally of the last 7 months is running out of steam.

The Reserve Bank is clearly now back in the mood to fight inflation and the recent decision to rise interest rates confirms that they believe the Australian economy will fare well in 2010. But if their economic outlook is correct, then why haven’t stocks rallied further?

Here we are in the dreaded month of September and yet stocks are still on an upward trend. But as each day passes the bulls become more bullish and those suggesting a major correction is due become more adamant that this rally cannot last. So who might be right?

In September last year I looked at the 52 week share price highs and lows for a range of well know stocks trading on the ASX. As luck would have it, a few days later Lehman Brothers went under and stock markets around the world tumbled. But now that the dust has settled (I hope), it might be interesting to go back and look at these companies and see what has happened to their stock prices since September 2008.

As I write today the ASX 200 Index is down around 3-4% and I would guess that most people now have seen around 30-60% slashed from the value of their stock portfolios. For many of us this has put us in the red and for some unlucky investors probably wiped out their portfolios.