Rudi’s View: Australia’s Bull Market Stocks

This story features AMP LIMITED, and other companies. For more info SHARE ANALYSIS: AMP

By Rudi Filapek-Vandyck, Editor FNArena

The story below follows on from my Weekly Insights story, titled "Is This A Bull Market, Or What Exactly Is It? ", written on Monday, 9 July 2013 and published in the form of an email to paying subscribers on the day. The story will be re-published on the FNArena website on Wednesday.

In the Weekly Insights story I reported my research has discovered only 61 members of the ASX200 can genuinely be labeled as being in an uptrend. This assessment was made by looking at multi-year price charts with monthly price bars, to ignore the day-to-day noise and concentrate on the underlying trend instead.

These 61 stocks consists of two groups: 10 stocks whose price charts suggest that after a long and steady decline, a new uptrend has been established, and 51 stocks whose price charts simply state the obvious: uptrend.

My main consideration when looking at price charts for 202 stocks that currently make up the ASX200 was centred around the question: if a young child were to look at the chart, what would it say? Uptrend? Downtrend? Or side-ways?

On this basis, the following 10 stocks seem to be in a newly established uptrend:

– AMP ((AMP))
– Ardent Leisure ((AAD))
– Aristocrat ((ALL))
– Brambles ((BXB))
– Commonwealth Property Office ((CPA))
– Computershare ((CPU))
– CSR ((CSR))
– Dexus Property ((DXS))
– DUET ((DUE))
– Mirvac ((MGR))

According to the same methodology, the following 51 names are in a firm, established uptrend:

– Acrux ((ACR))
– Adelaide Brighton ((ABC))
– Amcor ((AMC))
– ANZ Bank ((ANZ))
– APA Group ((APA))
– Aurizon ((AZJ))
– Breville Group ((BGR))
– BWP Trust ((BWP))
– Carsales.com ((CRZ))
– Coca-Cola Amatil ((CCL))
– CommBank ((CBA))
– Crown ((CWN))
– CSL ((CSL))
– DuluxGroup ((DLX))
– Envestra ((ENV))
– Flexigroup ((FXL))
– Flight Centre ((FLT))
– Graincorp ((GNC))
– Henderson Group ((HGG))
– iiNet ((IIN))
– Insurance Australia Group ((IAG))
– Investa Office Fund ((IOF))
– Invocare ((IVC))
– James Hardie ((JHX))
– JB Hi-Fi ((JBH))
– MT2 Telecom ((MTU))
– Macquarie Group ((MQG))
– McMillan Shakespeare ((MMS))
– Navitas ((NVT))
– Oil Search ((OSH))
– Platinum Asset Management ((PTM))
– QBE Insurance ((QBE))
– Ramsay Healthcare ((RHC))
– ResMed ((RMD))
– Sigma Pharmaceuticals ((SIP))
– Singapore Telecom ((SGT))
– Sirtex Medical ((SRX))
– Sonic Healthcare ((SHL))
– SP Ausnet ((SPN))
– Spark Infrastructure ((SKI))
– Suncorp ((SUN))
– Super Retail ((SUL))
– Tatts Group ((TTS))
– Telstra ((TLS))
– The Reject Shop ((TRS))
– TPG Telecom ((TPM))
– Transurban ((TCL))
– Treasury Wine Estates ((TWE))
– Wesfarmers ((WES))
– Westfield ((WDC))
– Westpac Bank ((WBC))
– Woolworths ((WOW))

Here are a few price charts to prove my point/support my analysis.
 

Of course, some of these equities will at some point run out of steam, take a bath, do a U-turn, maybe swing side-ways for a while, because being in a sustainable uptrend does not mean the share price will only go up forever and ever. Investors should always conduct their own research in line with their own goals and strategies.

But as I argued in Weekly Insights on Monday, stocks in an uptrend deserve to be treated with bull market strategies. Stocks not in a sustainable uptrend will wreck your portfolio if you dare to give them a bull market treatment. At least, investors "risk" that being the case.

A bull market is all about "timing" (as the longer term trend is up) but in a (non-trending) bear market investors better focus on "risk" because that's what ultimately will decide the positive or negative outcome from strategies applied.

Use these insights to your own benefit.

Question: 61 stocks out of 202 equals 30%. Is this enough to declare this market as being a "bull market"?

I'll leave the answer to this question to your own discretion.

(Also note, while CBA, ANZ and WBC are arguably in an uptrend, NAB is still going side-ways, at best)

Final Note: Just discovered I had accidentally omitted CBA from my list and calculations. So everything I wrote on Monday and above should be interpreted as +1 (CBA). Apologies for this. Doesn't change one iota to the underlying story.

(Do note that, in line with all my analyses, appearances and presentations, all of the above names and calculations are provided for educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions.)  

P.S. I – All paying members at FNArena are being reminded they can set an email alert for my Rudi's View stories. Go to Portfolio and Alerts in the Cockpit and tick the box in front of 'Rudi's View'. You will receive an email alert every time a new Rudi's View story has been published on the website. 

P.S. II – If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

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