ASX 200 Looks Ready to Rally

• Strong close in New York influences Australian markets.
• ASX 200 looks poised to continue higher.
• Various companies continue to grind higher.

The ASX 200 found itself bullish on Wednesday gaining roughly AU$35 early during the session. All things being equal, the index is on the verge of a breakout, and we have seen several large cap companies in Australia post steady gains over the last week or so. This is starting to carry through to the index itself, as the market has recently broken above the crucial AU$8400 level. This is an area that had been a bit of a barrier previously, so now it’s just a matter of picking up enough momentum to get a bit of follow through.

It is worth noting that New York closed with a surge higher, after what was somewhat lackluster trading. This may have carried on into the Asian markets as we have seen gains in multiple exchanges, and of course Australia would not be immune to “risk on” behavior.

RIO Tinto Ltd (RIO)

RIO Tinto found itself slightly higher during the trading session on Wednesday, gaining just 0.07%. Ultimately, this is a market that had been struggling for some time, and the recent recovery has made the last month almost break even. For the year, RIO is down a little over 6%, as the materials giant continues to suffer from underperformance. Currently speaking, the market is well above the massive “floor in the market” closer to the AU$103 level, but it does look as if there is a bit of exhaustion in this stock right around the AU$118 level. More momentum will have to enter this market for it to truly recover. The dividend of AU$2.617 does help those who are looking to hang on to this behemoth company for the longer term, but patients will probably continue to be needed based upon the action that has been seen throughout the year.

Goodman Group (GMG)

Real estate continues to do quite well in Australia, which can be observed with the Goodman Group. This stock rallied 0.79% during the Wednesday session, to gain AU$0.30. The market is currently sitting at an all-time high, grinding steadily higher for the last year. In fact, the real estate giant now has posted a 65.06% return for the year and is showing no real signs of letting up. If history is to be believed, there seems to be buyers willing to step in and pick up each and every dip that comes along.

Brambles Ltd (BXB)

Brambles had a solid Wednesday, gaining 1.11% as the industrials conglomerate saw momentum pick up yet again. It rallied 5.51% for the last month, and over the last year has made gains of 47.16%. Brambles continues to flirt with the idea of breaking above the AU$20 level, an area that would cause a little bit of psychological benefit for the market. Interestingly enough, volume has been picking up since the last earnings call, when brambles surprised with an 8.11% beat on earnings estimates, and a surprise AU$3.15 million gain on revenue. It appears that traders are more than willing to pay for growth at this point.

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