ASX 200 dips on weaker energy and resources stocks, Goodman leads property resurgence

Today in Review

Markets

The S&P/ASX 200 (XJO) finished 11.4 points lower at 7,770.6, 0.41% from its session low and 0.21% from its high. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by a disturbing 98 to 183. For the week, the XJO finished up 110.3 points or 1.29% higher.

The Real Estate Investment Trusts (XPJ) (+1.5%) sector was the best performing sector today, likely in response to a strong gain in sector leader Goodman Group (GMG) (+3.4%). GMG also notched it's highest close in 15-years and is a feature stock in today's ChartWatch.

Also doing well today was the Health Care (XHJ) (+1.3%) sector, it tends to do well when investors seek to play defence. CSL (+1.7%), Cochlear (COH) (+0.9%), Resmed (RMD) (+1.2%) and Ramsay Healthcare (RHC) (+1.0%) each gained.

Doing it tough today was the Energy (XEJ) (-1.3%) and Resources (XJR) (-1.1%) sectors. Within Resources, stocks within the Gold (XGD) (-1.3%) sub-index featured among the biggest losers (the zebra pattern continues! 🦓)

The reason for falls in energy stocks was likely the second day of modest falls in crude oil and natural gas prices. Falls in resources were harder to explain given each of the key base metals closed nicely higher in Thursday trade on the London Metals Exchange.

South32 (S32) fell 2.3%, as did IGO (-1.8%), Nickel Industries (NIC) (-1.3%), and Sandfire Resources (SFR) (-0.7%).

No doubt a dip in the iron ore price penalised Fortescue (FMG) (-2.4%), BHP Group (BHP) (-0.8%) and Rio Tinto (RIO) (-0.5%).

ChartWatch

Goodman Group (ASX: GMG)

Noted in the Market Wrap for its solid gain today, GMG possesses one of the best charts in the ASX 200 in terms of its clear demonstration of excess demand. It's the near-perfect example of it.

I note well-established and strengthening short and long term uptrends, plus the short term trend is also providing excellent dynamic support. The price action has moved back to rising peaks (technically troughs are still falling, but I did say "near-perfect!). The candles are predominantly white.

Together, these factors represent a demand side intent on accumulation and buying the dip, versus a supply side which continues to shrink away. Importantly, neither side is yet baulking at the higher GMG price.

Demand is at 29.46, and likely also to work in and around 31.64. Supply? Well I was surprised to see an old all-time high way back in February 2007, just before the onset of the GFC.

Add back dividends and GMG is well beyond this level, and regardless, I suggest it's far too ancient to have an impact near-term prices.

Light & Wonder (ASX: LNW)

Just a quick ditto here. This one caught my eye as I was working on the Interesting Movers section below. It's another almost perfect case study in excess demand.

I know, I know...show me the chart which hasn't gone bottom left-top right yet Carl! I want a bargain!

Sorry, that's not my style. I look at charts like GMG and LNW, and just like those demanding and those supplying, I do see a bargain!

Ramsay Healthcare (ASX: RHC)

To provide a greater insight into my trading style, I present to you the RHC chart. This is about as early as I can go in a new uptrend. This is my "bargain" style of a chart!

Keep in mind, I have no idea whether RHC is a bargain in terms of its fundamentals, and nor do I care. Simply, this is the style of chart which suggests to me the demand-side is starting to dominate again, and therefore it's the earliest I can get involved.

They key to the RHC chart (apart from a well-established short term uptrend) is the huge and full white candle posted on 29 February after the company's first half results. I don't need to read those results to tell you they dramatically shifted the markets opinion of RHC's future earnings potential.

I think you can see that for yourself (check the surge in volume on that day also).

Importantly, the 29 February burst cracked the RHC price above the long term downtrend ribbon. Crucially, this ribbon is now behaving as dynamic support after an entire bear market of providing dynamic resistance.

The previously well-defined top of the 46.76-54.10 trading range is now acting as demand, also very important. 57.23 is the next historical supply point, but 59.54 is likely more important.

I suggest a new long term uptrend has begun here and the market has moved back to an accumulation and buy the dip mentality.

Economy

Today

• There weren't any major economic data announcements in our time zone today.

Later this week

Saturday

• 00:00 USA Federal Reserve Chairman Jerome Powell speaks

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Interesting Movers

Trading higher

• +9.6% Opthea (OPT) - No news, rise is consistent with prevailing short term uptrend, long term trend turning from down to up

• +9.3% Jupiter Mines (JMS) - No news, South32's shutdown drives upside for Jupiter Mines – The ASX's largest manganese miner

• +8.2% Ora Banda Mining (OBM) - No news, closed back above short term uptrend ribbon, rise is consistent with long term uptrend

• +7.7% Fisher & Paykel Healthcare Corporation (FPH) - FPH updates FY24 revenue and earnings guidance

• +7.3% Anteris Technologies (AVR) - No news, rise is consistent with prevailing short term uptrend, long term trend turning from down to up

• +4.8% Macmahon Holdings (MAH) - Rise is consistent with prevailing short and long term uptrends

• +4.6% Bannerman Energy (BMN) - No news, 5 out of 6 days up now for uranium price, assisting broad ASX uranium sector strength, continues to bounce off long term uptrend ribbon, rise is consistent with prevailing short and long term uptrends

• +4.3% Playside Studios (PLY) - No news, rise is consistent with prevailing short and long term uptrends

• +4.2% Tuas (TUA) - No news, continued positive response to Wednesday's First Half FY24 Results, rise is consistent with prevailing short and long term uptrends

• +4.1% Virgin Money UK LSE (VUK) - Recommended cash offer for Virgin Money UK PLC

• +4.0% Platinum Asset Management (PTM) - No news, rise is consistent with prevailing short term uptrend, testing dynamic resistance of long term downtrend ribbon

• +3.6% Light & Wonder (LNW) - No news, rise is consistent with prevailing short and long term uptrends

• +3.5% Life360 (360) - No news, rise is consistent with prevailing short and long term uptrends

• +3.4% Goodman Group (GMG) - No news, rise is consistent with prevailing short and long term uptrends

Trading lower

• -6.3% Genesis Minerals (GMD) - Five-year Strategic Plan

• -6.2% Cettire (CTT) - No news, closed below short term uptrend ribbon, confirmed falling peaks

• -5.7% Brainchip Holdings (BRN) - No news, characteristic volatility!

• -5.4% WA1 Resources (WA1) - No news 🤔

• -5.3% Bellevue Gold (BGL) - Becoming a substantial holder from State Street Corporation, weaker ASX gold sector likely due to fall in gold price

• -5.1% Latin Resources (LRS) - Lithium carbonate price on GFX down 2%

• -5.1% Telix Pharmaceuticals (TLX) - No news 🤔

• -5.1% Emerald Resources (EMR) - No news, weaker ASX gold sector likely due to fall in gold price, confirms another lower peak, fall is consistent with prevailing short term downtrend

• -5.0% Audinate Group (AD8) - No news 🤔, confirms lower peak

• -5.0% Resolute Mining (RSG) - No news, weaker ASX gold sector likely due to fall in gold price

• -5.0% OFX Group (OFX) - Change in substantial holding from PPT (decrease)

• -4.9% Stanmore Resources (SMR) - No news, fall is consistent with prevailing short term downtrend, long term trend is transitioning from up to down

Broker Notes

• The A2 Milk Company (A2M) retained at neutral at Citi; Price Target: $5.75

• APM Human Services International (APM) retained at equal-weight at Morgan Stanley; Price Target: $1.40

• Brickworks (BKW)

  • Downgraded to hold from buy at Bell Potter; Price Target: $29.00 from $27.80

  • Retained at buy at Citi; Price Target: $35.00

  • Retained at neutral at Jarden; Price Target: $28.50 from $28.75

  • Retained at neutral at Macquarie; Price Target: $27.30 from $25.15

  • Retained at hold at Morgans; Price Target: $30.00 from $25.30

  • Retained at buy at UBS; Price Target: $32.50 from $33.00

• Clover Corporation (CLV) retained at neutral at UBS; Price Target: $0.60 from $0.85

• Clarity Pharmaceuticals (CU6) retained at buy at Bell Potter; Price Target: $3.90

• Premier Investments (PMV) retained at sell at UBS; Price Target: $27.00 from $24.00

• Sigma Healthcare (SIG)

  • Retained at overweight at Barrenjoey; Price Target: $1.30

  • Retained at neutral at Citi; Price Target: $1.30 from $1.15 Retained at hold at Jefferies; Price Target: $1.30

  • Retained at underperform at Macquarie; Price Target: $0.90 from $0.88

  • Retained at equal-weight at Morgan Stanley; Price Target: $1.22 from $0.94

  • Downgraded to hold from add at Morgans; Price Target: $1.14 from $1.07

  • Downgraded to sell from hold at Shaw and Partners; Price Target: $1.00 from $0.90

• Viva Leisure (VVA) retained at buy at Citi; Price Target: $2.42 from $2.74

• Westpac Banking Corporation (WBC) retained at underperform at Macquarie; Price Target: $26.00

• Webjet (WEB)

  • Retained at buy at Citi; Price Target: $9.90 from $7.90

  • Downgraded to neutral from outperform at Macquarie; Price Target: $8.88 from $8.37

  • Retained at equal-weight at Morgan Stanley; Price Target: $7.45

  • Retained at add at Morgans; Price Target: $13.33 from $8.55

• Wesfarmers (WES) retained at neutral at Macquarie; Price Target: $61.20

Scans

This article first appeared on Market Index on 22 March 2024.