RIVKIN: Look Out For The Santa Claus Rally For Australian Stocks

Getty/Mark Wilson

Australian stocks are set for their best open in weeks if futures trade over the weekend and a strong rally in offshore markets is any guide.

But it could be more than just a one-day wonder according to Oliver Gordon, Rivkin’s Global Investment Director, who wrote this morning in a note titled “The Likelihood of a Santa Claus rally” that:

The past has shown that prices – despite a tendency to sell off in early November – tend to rally strongly from mid to late November into the New Year.

You may or may not believe in seasonal patterns but Gordan makes the point that the average return in December of 1.51% over the past decade is second only to April’s 1.61%.

He says that at present the “ASX200 is currently at a price point where corrections often terminate at a time when seasonally share prices have lifted higher.”

He offers the following chart as compelling evidence that Santa Claus just might be coming to town.

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