ASX 200 claws back half Wed's loss, gold, copper, and uranium investors can't believe their luck

Today in Review

Markets

The S&P/ASX 200 (XJO) finished 34.8 points higher at 7,817.3, 0.45% from its session low and 0.22% from its high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by a resounding 207 to 72.

Doing well today were the Information Technology (XIJ) (+1.18%) and Real Estate Investment Trusts (XPJ) (+0.75%) sectors – two of the hardest hit sectors from yesterday's washout likely only bouncing back.

Also doing well, were two sectors which are used to being near the top of the sector performance lists lately, the Gold (XGD) (+1.17%) sub-index and the Energy (XEJ) (+0.67%) sector. (Note, Utilities (XUJ) which as a large Energy overlap also gained 0.94%).

Once again, uranium stocks are featuring highly in the top performers table – I note they've taken out 3 out of the top 12 places above. I'll take a look at why they're getting some love in ChartWatch below.

Encouragingly, all eleven of the major ASX sector indices were up today, but if I had to pick a laggard, it would be the Consumer Staples (XSJ) sector which only gained 0.1%.

ChartWatch

High Grade Copper Futures (COMEX)

I brought this chart to your attention in the Evening Wrap on Thursday 14 March. It's easy to see on the chart above which candle triggered that update! It's the big white one which blasts through three overhead points of supply between 3.93 and 4.00.

A couple of vital components of my technical analysis method are in evidence in this chart. The first is the importance of big white candles. You might think: Ooh, that's gone up a lot, probably too far, I can't buy that now. I think: Ooh, that's gone up a lot, there must be a pile of excess demand, and that's exactly what I'm looking for in a buying opportunity.

Nothing is ever too high to buy for me if the trends, price action and candles continue to demonstrate a state of excess demand. It's a state of mind. It's not for everyone.

The second component is the expectation that very strong areas of historical supply will tend to act as equally strong areas of future demand. We can see from the chart above how the 3.93 to 4.00 supply zone provided a very strong area where demand flooded back in to buy the pullback.

Yesterday's candles is another large white candle (it's the second last on the chart because the last candle is live and refers to today's evolving session). This time, a very important supply point at 4.13 has fallen by the wayside. and It now too moves to demand.

There's nothing in this chart which suggests the price can't continue in its short term trend (with the long term trend transitioning from down to up and the long term uptrend ribbon now confirmed as dynamic support). 4.33 and 4.3725 are the next two key points of historical supply.

I will conduct a comprehensive technical analysis overview of the ASX Copper sector in a special edition of tomorrow's ChartWatch 🔬.

Uranium Futures (COMEX)

The uranium futures price is at a critical technical juncture. After a very strong short term uptrend between July 2023 and January, a steady corrective phase saw it retrace to the long term uptrend ribbon.

While we're on the topic of key components of my technical analysis method, let me add another! My trend ribbons offer dynamic support on the way up and dynamic resistance on the way down.

For uranium, it's a case of the long term uptrend ribbon offering dynamic support, as you can see clearly with the price bouncing steadily since the 13 March low at 83.15.

Just as important, is a confirmation of this support in the form of rising troughs. This confirms the market has moved back to a buy the dip mentality. Wednesday's formation of a higher trough at 87.20 is encouraging in this regard.

A close above 89.40 will confirm a move back to rising peaks, and therefore signal continued supply removal. Rising peaks and rising troughs is another key component of my technical analysis method.

Looking forward, I suggest that while the price continues to close above 83.15 the long term trend is intact. A close above the short term downtrend ribbon will remove the final short term barrier impeding a potential move back to the 18 January high at 107.25.

Economy

Today

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

Later this week

Friday

• 23:30 USA March employment data

  • Non-Farm Employment Change (+205K forecast vs 275K previous)

  • Unemployment Rate (3.9% forecast vs 3.9% previous)

  • Average Hourly Earnings m/m (+0.3% forecast vs +0.1% previous)

Latest News

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Morning Wrap: ASX 200 to rise, S&P 500, Nasdaq inch higher + Gold, copper and uranium stocks soar

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Interesting Movers

Trading higher

• +16.5% 29METALS (29M) - No news, ASX copper sector broadly higher on rise in copper prices Wednesday

• +15.0% Novonix (NVX) - NVX and LEL Combine Natural Graphite Interests, closed back above long-term downtrend ribbon 🔎📈

• +14.1% WA1 Resources (WA1) - No news, 3-day rally now, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +11.8% PYC Therapeutics (PYC) - No news, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +10.5% Sayona Mining (SYA) - Operational Review Supports NAL Ramp-Up Plan, blip!

• +9.7% Kingsgate Consolidated (KCN) - No news, initiated at buy at Canaccord Genuity, price target $2.50

• +7.8% Chalice Mining (CHN) - No news, possibly a sympathy move with several other extremely beaten-down battery metals-related stocks today

• +6.6% Qoria (QOR) - No news, rise is consistent with prevailing short-term uptrend, long-term trend is transitioning from down to up 🔎📈

• +6.3% Arcadium Lithium (LTM) - No news, tracking a bounce in US listing on Wednesday

• +6.3% Ioneer (INR) - No news, possibly a sympathy move with several other extremely beaten-down battery metals-related stocks today

• +5.2% Liontown Resources (LTR) - No news, possibly a sympathy move with several other extremely beaten-down battery metals-related stocks today

• +5.2% Servcorp (SRV) - No news, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +4.9% KMD Brands (KMD) - Director on market purchase ~$32k

• +4.7% Jupiter Mines (JMS) - No news, rise is consistent with prevailing short-term uptrend, long-term trend is transitioning from down to up 🔎📈

• +4.6% South32 (S32) - No news, key base metals for the company (Aluminium, Copper, Lead) all traded higher on Wednesday

• +4.4% Alumina (AWC) - No news, Aluminium traded higher on Wednesday

Trading lower

• -4.3% Macmahon Holdings (MAH) - No news 🤔

• -3.3% Opthea (OPT) - Opthea Key Opinion Leader Event on Sozinibercept

• -2.9% Lycopodium (LYL) - No news, fall is consistent with prevailing short-term downtrend and falling peaks and falling troughs, predominance of supply-side candles 🔎📉

• -2.9% Ridley Corporation (RIC) - No news 🤔

• -2.9% Integral Diagnostics (IDX) - No news 🤔

• -2.7% Cettire (CTT) - No news, fall is consistent with prevailing short-term downtrend and falling peaks and falling troughs, predominance of supply-side candles 🔎📉

• -2.6% Unibail-Rodamco-Westfield (URW) - URW SE - AGM 2024 - Letter to CDI Holders

Broker Notes

• 29METALS (29M) retained at overweight at Morgan Stanley; Price Target: $0.55

• The A2 Milk Company (A2M) retained at hold at Bell Potter; Price Target: $5.70

• Australian Agricultural Company (AAC) retained at buy at Bell Potter; Price Target: $2.00

• Australian Vintage (AVG) retained at hold at Bell Potter; Price Target: $0.41

• Bega Cheese (BGA) retained at buy at Bell Potter; Price Target: $5.00

• BHP Group (BHP) retained at neutral at Macquarie; Price Target: $42.00

• Bubs Australia (BUB) retained at hold at Bell Potter; Price Target: $0.14

• Cobram Estate Olives (CBO) retained at hold at Bell Potter; Price Target: $2.10

• Champion Iron (CIA) downgraded to overweight from buy at Jarden; Price Target: $7.76 from $9.24

• Cooper Energy (COE) retained at outperform at Macquarie; Price Target: $0.27 from $0.20

• Computershare (CPU) retained at outperform at Macquarie; Price Target: $29.00 from $28.00

• Clean Seas Seafood (CSS) retained at hold at Bell Potter; Price Target: $0.27

• DGL Group (DGL) retained at buy at Bell Potter; Price Target: $0.75

• Deterra Royalties (DRR) retained at overweight at Morgan Stanley; Price Target: $5.60

• Elders (ELD) retained at buy at Bell Potter; Price Target: $9.50

• Electro Optic Systems Holdings (EOS) retained at buy at Bell Potter; Price Target: $2.20 from $2.30

• Evolution Mining (EVN) retained at overweight at Morgan Stanley; Price Target: $3.90

• Fortescue (FMG) retained at underperform at Macquarie; Price Target: $14.00

• Graincorp Class A (GNC) retained at buy at Bell Potter; Price Target: $9.30

• Inghams Group (ING) retained at buy at Bell Potter; Price Target: $4.35

• Kingsgate Consolidated (KCN) initiated at buy at Canaccord Genuity; Price Target: $2.50

• Mineral Resources (MIN) retained at outperform at Macquarie; Price Target: $79.00 from $77.00

• Metcash (MTS) initiated at equal-weight at Morgan Stanley; Price Target: $0.00

• Newmont Corporation (NEM) initiated at buy at Citi; Price Target: $69.00

• Nickel Industries (NIC) retained at overweight at Morgan Stanley; Price Target: $0.95

• Noumi (NOU) retained at buy at Bell Potter; Price Target: $0,175

• Nufarm (NUF) retained at hold at Bell Potter; Price Target: $6.35

• OOH!Media (OML) initiated at buy at UBS; Price Target: $2.05

• QBE Insurance Group (QBE) downgraded to neutral from outperform at Macquarie; Price Target: $18.00 from $17.10

• Rural Funds Group (RFF) retained at buy at Bell Potter; Price Target: $2.40

• Rio Tinto (RIO)

  • Retained at neutral at Macquarie; Price Target: $121.00 from $125.00

  • Retained at overweight at Morgan Stanley; Price Target: $140.00

• Ramelius Resources (RMS) retained at neutral at Macquarie; Price Target: $1.90 from $1.70

• Regis Resources (RRL)

  • Retained at outperform at Macquarie; Price Target: $2.60

  • Retained at overweight at Morgan Stanley; Price Target: $2.45

• South32 (S32)

  • Retained at outperform at Macquarie; Price Target: $3.80

  • Retained at overweight at Morgan Stanley; Price Target: $3.35

• Select Harvests (SHV) retained at buy at Bell Potter; Price Target: $4.70

• Synlait Milk (SM1) retained at hold at Bell Potter; Price Target: $0.66

• Smartpay Holdings (SMP) retained at buy at Shaw and Partners; Price Target: $2.20

• Woodside Energy Group (WDS) downgraded to neutral from buy at Bank of America; Price Target: $30.00 from $33.00

• Westgold Resources (WGX) retained at outperform at Macquarie; Price Target: $2.70 from $2.90

• Whitehaven Coal (WHC) retained at overweight at Morgan Stanley; Price Target: $8.50

Scans

This article first appeared on Market Index on Thursday 4 April 2024.