ASX 200 up as base metals, iron ore, gold and lithium gains drive magnificent mining sector

Today in Review

Markets

The S&P/ASX 200 (XJO) finished 35.1 points higher at 7,824.2, 0.45% from its session low and just 0.14% from its high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by 157 to 123.

The Resources (XJR) (+1.5%) sector was the best performing sector today, likely in response to rising base and precious metals, iron ore, and lithium prices. A perfect storm for sector outperformance! There's no point singling out one particular group, they were all pretty good, so I'll just throw them all in one big table!

Doing it tough today was the Real Estate Investment Trusts (XPJ) (-1.0%) sector which has somewhat been on the nose during the last six trading sessions in response to rising market yields. It could easily be argued property trusts are the most interest rate sensitive sector on the ASX.

ChartWatch

Silver Futures COMEX

Copper is hot, gold is hot. We know that. But also super hot right now is silver! The daily chart of silver appears to be making great strides, but I note that the weekly chart (above) the price is approaching a few important historical points of supply.

Don't get me wrong, the daily chart's short term trend, price action, and candles are all indicative of convincing demand-side control, but investors who have rushed into silver stocks or into Global X Metal Securities Australia Ltd (ASX: ETPMAG) on the basis that this run is going to continue unimpeded might be disappointed in the short term.

It's important to note that good technical analysis understands that a historical point of supply is only indicative of where we might see supply reassert itself in the future. We won't know until we get there if supply still exists at the point, and this will manifest in the candles.

Black candles and or upward pointing shadows at a historical point of supply are indicative of the manifestation of excess supply, and therefore that the prevailing uptrend may require at least a breather (or a correction, or at worst the end of trend, depending on their frequency and severity).

On the other hand, if you don't see these supply-side candles, but rather strong demand-side showings such as white candles and downward pointing shadows, then there's no supply at the previous point of supply at all. In this case, upward moves can be explosive as the market effectively gets a green light to keep rising.

So, the key levels for silver futures on COMEX (you can follow along at home on your TradingView platform) are: 28.39 and 29.39. Really, this is likely to be a zone of potential supply, so watch the candles closely in there.

Above this zone, it's far from plain sailing for silver futures. 30.93 and 32.48 are likely to come into play on any break of 28.39-29.39, so silver bulls, even if we can the next resistance level, further upside will likely be hard-fought.

Economy

Today

• Westpac Consumer Sentiment

  • -2.4% to 82.4 (vs -1.8% in February), below 100 = pessimism

  • Now 2-years since Aussie consumers were optimistic = second worst since gauge began in the mid-1970's, only 1990's "recession we had to have" was worse

  • Massive interest rate uncertainty to blame: Just over 40% of consumers are still bracing for rate increases, while 24% expect no change, 21% expect declines and 15% reported “don’t know”.

  • ‘Finances, next 12mths’ subindex continues to improve, though, up 1.8% to 95.5 (not up 13.6% from lows last year

  • ‘Time to buy a major item’ sub-index was the worst, -6.6% to 78.7 reflecting price pressures

• NAB Business Confidence

• +1 point to 1 point vs flat in February (conditions +1 point, vs employment steady, and profitability -4 points)

• Positive signs for retail and construction, but off a very low base

• WA firms continue to report the strongest conditions 💪

• Modest easing in the pace of labour and materials cost growth but both remain elevated

• Retail price growth also remained strong at 1.3% qoq, indicating progress on inflation gradual

Later this week

• Wednesday

  • 10:30 USA Core CPI March (+0.3% forecast vs +0.4% February)

• Thursday

  • 04:00 USA Federal Reserve FOMC Meeting Minutes

  • 10:15pm EU ECB Main Financing Rate (4.5% no change forecast)

  • 10:30pm USA Core PPI March (+0.2% forecast vs +0.3% February)

• Friday

  • 03:00 USA 30-year Government T-Bond Auction

  • 11:00 CHN Trade Balance

• Saturday

  • 00:00 USA University of Michigan Consumer Sentiment (79.0 forecast vs 79.4 previous)

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Interesting Movers

Trading higher

• +13.9% Ioneer (INR) - No news, lithium prices in China continue to recover, rise is consistent with prevailing short term uptrend 🔎📈

• +8.8% Liontown Resources (LTR) - No news, beaten down battery metals stocks saw some short covering and speculative buying today as lithium prices continued to creep higher in China

• +8.7% Chalice Mining (CHN) - No news, beaten down battery metals stocks saw some short covering and speculative buying today as lithium prices continued to creep higher in China

• +7.7% Elders (ELD) - Bounce after yesterday's post-FY24 Trading Update sell off, helped by three brokers retaining at buy, and one upgrade to add (See Broker Moves)

• +7.4% Zimplats Holdings (ZIM) - Precious metals rally assisting sector strength, closed above short term downtrend ribbon 🔎📈

• +6.8% Jupiter Mines (JMS) - No news, rising base metals prices assisting sector rally

• +6.5% Predictive Discovery (PDI) - Excellent Results from Argo Central Trend, rise is consistent with prevailing short and long term uptrends 🔎📈

• +6.4% Ansell (ANN) - Ansell to acquire Kimberly Clark's Personal PPE Business

• +6.4% Metals X (MLX) - Annual Report, rising tin and copper prices, rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.8% Playside Studios (PLY) - No news, rise is consistent with prevailing long term uptrend, closed back above short term trend ribbon 🔎📈

• +5.7% Aurelia Metals (AMI) - Continued positive response to Federation Exploration Update, rising copper price assisting sector rally, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up

• +5.5% Electro Optic Systems Holdings (EOS) - No news, rise is consistent with prevailing long term uptrend 🔎📈

• +5.4% Arafura Rare Earths (ARU) - No news, beaten down battery metals stocks saw some short covering and speculative buying today as lithium prices continued to creep higher in China

• +5.1% Red 5 (RED) - Corporate Presentation - Gold Forum Europe (today) and March Qtr Puts Red 5 On Track To Deliver Top End of Guidance (yesterday)

• +4.8% Whitehaven Coal (WHC) - No news, upgraded to buy from neutral at UBS and price target increased from $8.70 from $6.30, closed back above long term trend ribbon 🔎📈

• +4.4% Zip Co (ZIP) - No news, trying to bounce off short term uptrend ribbon 🔎📈

• +4.3% APM Human Services International (APM) - No news, bounce after yesterday's post-Non-Binding Acquisition Proposal and Business Update sell off

• +4.2% IGO (IGO) - No news, beaten down battery metals stocks saw some short covering and speculative buying today as lithium prices continued to creep higher in China, nickel price bounce

• +3.6% Arcadium Lithium (LTM) - No news, beaten down battery metals stocks saw some short covering and speculative buying today as lithium prices continued to creep higher in China

Trading lower

• -11.9% Spartan Resources (SPR) - Drilling hits visible gold over 1km deep below Never Never

• -6.0% Qoria (QOR) - Pullback after yesterday's post-Qoria rejects unsolicited non-binding proposal from K1 surge

• -4.9% Sayona Mining (SYA) - No news, completely missed broader sector rally ⚠️, fall is consistent with prevailing short and long term downtrends 🔎📉

• -4.6% EML Payments (EML) - No news 🤔, closed below short term uptrend ribbon 🔎📉

• -4.5% Audinate Group (AD8) - No news, fall is consistent with falling peaks and falling troughs, predominantly supply side candles, close below the short term uptrend ribbon 🔎📉

• -4.3% Pepper Money (PPM) - No news 🤔, closed below short term uptrend ribbon 🔎📉

• -4.3% Nanosonics (NAN) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -3.5% Westgold Resources (WGX) - Merger to Create 400 kozpa Australian Gold Miner

Broker Notes

• Life360 (360)

  • Retained at buy at Bell Potter; Price Target: $16.25 from $14.50

  • Retained at buy at Goldman Sachs; Price Target: $14.20

  • Retained at overweight at Morgan Stanley; Price Target: $14.40

  • Retained at buy at Ord Minnett; Price Target: $15.20 from $11.98

• Adore Beauty Group (ABY) Retained at buy at Jarden; Price Target: $2.49

• Adairs (ADH) Retained at neutral at Jarden; Price Target: $2.09

• Ansell (ANN)

  • Retained at sell at Citi; Price Target: $111.00

  • Upgraded to outperform from underperform at CLSA; Price Target: $26.70 from $25.40

  • Upgraded to buy from hold at Jefferies; Price Target: $30.85 from $26.00

  • Upgraded to outperform from neutral at Macquarie; Price Target: $28.15 from $24.75

  • Retained at equal-weight at Morgan Stanley; Price Target: $24.14

  • Retained at overweight at Piper Sandler; Price Target: $152.00

• APM Human Services International (APM)

  • Retained at equal-weight at Morgan Stanley; Price Target: $1.40

  • Retained at accumulate at Ord Minnett; Price Target: $2.00

• Accent Group (AX1) Retained at neutral at Jarden; Price Target: $2.05

• Beacon Lighting Group (BLX) Retained at overweight at Jarden; Price Target: $2.90

• Bank of Queensland (BOQ) Retained at sell at Goldman Sachs; Price Target: $5.04 from $5.00

• Beach Energy (BPT)

  • Retained at buy at Bell Potter; Price Target: $1.80 from $1.90

  • Retained at outperform at Macquarie; Price Target: $1.95 from $2.05

  • Retained at equal-weight at Morgan Stanley; Price Target: $1.79

• City Chic Collective (CCX) Retained at neutral at Jarden; Price Target: $0.50

• Challenger (CGF) Retained at neutral at Macquarie; Price Target: $7.00 from $6.80

• Capricorn Metals (CMM) Retained at Neutral at Goldman Sachs; Price Target: $5.05

• Coles Group (COL) Retained at neutral at Jarden; Price Target: $16.90

• Core Lithium (CXO) Retained at Sell at Goldman Sachs; Price Target: $0.12

• Cygnus Metals (CY5) Retained at buy at Shaw and Partners; Price Target: $0.50

• De Grey Mining (DEG) Retained at Buy at Goldman Sachs; Price Target: $1.45

• Domino's Pizza Enterprises (DMP) Retained at overweight at Jarden; Price Target: $49.00

• Endeavour Group (EDV) Retained at overweight at Jarden; Price Target: $6.40

• Elders (ELD)

  • Downgraded to outperform from buy at CLSA; Price Target: $9.00 from $9.90

  • Retained at buy at Jefferies; Price Target: $7.50 from $7.70

  • Retained at outperform at Macquarie; Price Target: $8.25 from $10.45

  • Upgraded to add from hold at Morgans; Price Target: $9.00 from $7.40

  • Retained at buy at Shaw and Partners; Price Target: $9.00 from $10.00

• Evolution Mining (EVN) Retained at Buy at Goldman Sachs; Price Target: $4.00

• Flight Centre Travel Group (FLT)

  • Downgraded to sell from neutral at Goldman Sachs; Price Target: $18.30 from $20.00

  • Retained at buy at Jarden; Price Target: $23.50

• Gold Road Resources (GOR) Retained at Buy at Goldman Sachs; Price Target: $2.00

• Helloworld Travel (HLO) Retained at overweight at Jarden; Price Target: $3.75

• Harvey Norman Holdings (HVN) Retained at neutral at Jarden; Price Target: $4.80

• Insurance Australia Group (IAG) Retained at neutral at Goldman Sachs; Price Target: $6.30 from $6.00

• IGO (IGO) Retained at Buy at Goldman Sachs; Price Target: $7.50

• Iluka Resources (ILU) Retained at neutral at Macquarie; Price Target: $7.00

• Inghams Group (ING) Retained at overweight at Jarden; Price Target: $3.95

• JB HI-FI (JBH) Retained at underweight at Jarden; Price Target: $50.80

• Kogan.Com (KGN) Retained at neutral at Jarden; Price Target: $7.50

• Lovisa Holdings (LOV) Retained at buy at Jarden; Price Target: $28.69

• Liontown Resources (LTR) Retained at Neutral at Goldman Sachs; Price Target: $1.35

• Lynas Rare Earths (LYC) Retained at outperform at Macquarie; Price Target: $7.00

• Mineral Resources (MIN)

  • Downgraded to neutral from buy at Bank of America; Price Target: $70.00 from $72.00

  • Retained at Sell at Goldman Sachs; Price Target: $48.00

• Metcash (MTS) Retained at overweight at Jarden; Price Target: $4.20

• Nick Scali (NCK) Retained at overweight at Jarden; Price Target: $13.87

• Nickel Industries (NIC) Downgraded to neutral from buy at Bank of America; Price Target: $0.90 from $1.00

• Northern Star Resources (NST) Retained at Neutral at Goldman Sachs; Price Target: $14.60

• Pilbara Minerals (PLS) Retained at Sell at Goldman Sachs; Price Target: $2.90

• Patriot Battery Metals (PMT) Retained at outperform at Macquarie; Price Target: $2.00

• Premier Investments (PMV) Retained at neutral at Jarden; Price Target: $30.80

• PSC Insurance Group (PSI) Retained at buy at Ord Minnett; Price Target: $6.20 from $5.40

• Qantas Airways (QAN)

  • Retained at buy at Goldman Sachs; Price Target: $8.05

  • Retained at buy at Jarden; Price Target: $7.00

  • Retained at buy at Jefferies; Price Target: $7.94 from $7.62

  • Retained at outperform at Macquarie; Price Target: $6.00

  • Retained at overweight at Morgan Stanley; Price Target: $8.00

  • Retained at add at Morgans; Price Target: $6.75

  • Retained at hold at Ord Minnett; Price Target: $6.10

  • Retained at buy at UBS; Price Target: $7.50 from $7.55

• QBE Insurance Group (QBE) Retained at buy at Goldman Sachs; Price Target: $20.58 from $18.65

• Qoria (QOR)

  • Retained at buy at Ord Minnett; Price Target: $0.48 from $0.34

  • Retained at buy at Shaw and Partners; Price Target: $0.52 from $0.40

• Regis Resources (RRL)

  • Retained at Neutral at Goldman Sachs; Price Target: $2.20

  • Upgraded to neutral from sell at UBS; Price Target: $2.15 from $1.90

• Sandfire Resources (SFR) Downgraded to neutral from buy at UBS; Price Target: $9.35 from $8.85

• Silver Lake Resources (SLR) Retained at neutral at Macquarie; Price Target: $1.40 from $1.20

• Super Retail Group (SUL) Retained at neutral at Jarden; Price Target: $15.40

• Suncorp Group (SUN) Retained at buy at Goldman Sachs; Price Target: $17.54 from $16.25

• Temple & Webster Group (TPW) Retained at buy at Jarden; Price Target: $12.67

• The Reject Shop (TRS) Retained at buy at Jarden; Price Target: $6.70

• Treasury Wine Estates (TWE) Retained at overweight at Jarden; Price Target: $14.50

• Universal Store Holdings (UNI) Retained at buy at Jarden; Price Target: $5.22

• Woodside Energy Group (WDS) Retained at neutral at Jarden; Price Target: $29.00

• Webjet (WEB) Retained at buy at Jarden; Price Target: $9.55

• Wesfarmers (WES) Retained at neutral at Jarden; Price Target: $58.60

• Whitehaven Coal (WHC) Upgraded to buy from neutral at UBS; Price Target: $8.70 from $6.30

• Woolworths Group (WOW) Retained at overweight at Jarden; Price Target: $40.40

Scans

This article first appeared on Market Index on Tuesday 9 April 2024.