Australian Stocks Ready to Move Higher

Stock markets around the world have had a pretty strong year.  But this has left the majority of new investors wondering whether or not it is still a good idea to go long on these markets and to start buying into the Australian equities space.  These are very good questions to ask because things can get very tricky when we buy into stock markets that are trading at historically elevated levels.  The old market adage “buy low, and sell high” is almost always good advice.  But it can be very difficult to buy low if prices are already too high.

So in dealing with these questions we must first analyze the broad health of the corporate climate and the likelihood that the Reserve Bank of Australia will start to raise interest rates in an aggressive fashion.  It both of these elements remain supportive, then there is strong scope for Australian stocks to move higher into the second half of this year.  All of this bodes well for long term investments as long as external factors remain in-line with market expectations.  Specific examples here include the state of the Australian Dollar and the sustainability for emerging market growth projects to continue requiring base metals from the country.

Factors in the currency markets can be assessed on their own, and traders are even able to express market views in these areas with using a low spread broker through a such as Mocaz.  These resources also give you access to recent market reports that will show the relative strength of economies like China and India.  This is usually a good indication of whether or not those countries will continue to require assets like copper, which are generally made available through Australian export markets.  As long as this demand remains healthy, Australian export companies will likely remain strong.  If these companies are able to generate impressive earnings reports that surpass what is generally seen in the market consensus estimates, then there is clear scope for further runs higher in the Australian stock markets.

So when we look at the recent chart activity in stocks, it can be easy to get sucked into the hype and to start buying companies no matter what their current value might be at the moment.  But if we take a step back and adopt a conservative approach, there are still some clearly defined opportunities in stocks that could create some significant value in the months and years ahead.