The Australian All Ordinaries index was down 0.44% at 4,665 level on United States fiscal cliff fears. Australian shares have however surged during 2012, and have notched up their best performance since 2009 surging almost 15% in 2012.

Analysts expect this performance to continue at least in the first half of the next fiscal year, i.e, 2013. This is on the back of strong data from Australia and most of the analysts expect this data to be strong in the first quarter of the next fiscal year.

Craig James, Comm Sec economist, said, “It was short-lived strength, but there was a degree of strength when the Chinese data came through. What we\’re seeing now is some of the late book squaring and profit-taking by a number of the professional investors and some retail-type investors.”

This analyst expects strong data from the Asian countries and he expects the world markets to rise amidst some bad Euro zone worries. He also has faith in the United States indices and he expects the Dow Jones to break its all time highs of 14000 in the next fiscal year.

He also added, “After the good year that we\’ve had this year you\’d expect a degree of profit taking at the end of the year and indeed that\’s happening. Otherwise you\’d see the markets down a whole lot more than what we\’re seeing at the moment.”

Technical Analysis:

The All Ordinaries index is in a strong uptrend with the index surging ahead almost every day. The Relative Stochastic index for this Australian stock market is currently in an over bought territory, so a pullback in January could not be ruled out.

The main level that must be watched out for in the January series is the 4600 mark because that is a strong support for the markets and any small positive news will help the index to scale new highs in the next year.

However, the overall strength is obvious and this pullback could be utilized by investors to buy and get ready for the next leg of the bull run. The Index has strong support between 4,575 and 4,600 level. Overall a resumption of rally is expected after a small pull back.

Stocks to watch out for:

Sundance Resources Ltd. shares are in the news today and they surged 15%, the most in 17 months after gaining permit for its iron ore mine, gaining confidence that A$1.14 billion takeover from Sichuan Hanlong group will go ahead.

Samson Oil and Gas is also in the news today and the stock rebounded 12.80% today after slumping almost 9% on Friday after reporting delays in project at Wyoming.

Among the other losers, there were Atlantic Ltd. which slumped 11% and Bougainville Copper industries, facing some execution problems, and due to which, was down almost 15%.

Forecast:

The Australian All ordinaries exchange is in a strong up trend. A small pull back is expected from the current over bought levels. Many analysts fell that the index could touch 5,000 level in the next fiscal year.

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Category: Finances
Keywords: Dow Jones, ASX, Gold, Fiscal cliff, Brent Oil