ASX 200 closes shy of record, property and energy stocks gain as takeovers feature

Today in Review

Markets

Global equities appear to be in a synchronised growth phase as investors bet on a slew of interest rate cuts before the end of the year, and the local market is riding the coat tails of a broad risk-on rally.

The S&P/ASX 200 (XJO) finished 41.3 points higher at 7,811.9, 0.53% from its session low and 0.42% from its high/low. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by 164 to 109.

The Real Estate Investment Trusts (XPJ) (+1.8%) sector was again the best performing sector, backing up it’s gain on Thursday and Friday. The highlight was real estate agent McGrath (MEA) which popped over 25% after it revealed a takeover offer from a consortium of Knight Frank and Bayleys at $0.60 per share of an unlisted scrip alternative. The closed at $0.585.

Sector leader Goodman Group (GMG) (+3.7%) was the best of the big caps, it was the feature of Friday's ChartWatch due to its attractive technicals. Not far behind was Mirvac Group (MGR) which gained 2.2%.

Also doing well today were the Energy (XEJ) (+1.1%) sector. There's still a bit of money flowing back towards energy majors after last week's rally in crude oil and uranium, but another takeover here, of MMA Offshore (MRM) (+10.6%) also helped.

Only one of the eleven major ASX sector indices was down today, Consumer Discretionary (XDJ), but at a -0.01% loss for the sector let's call it flat for the day.

ChartWatch

S&P/ASX 200 (XJO)

Very solid here. Short and long term uptrends, a predominance of demand-side candles (i.e., those with white bodies and or downward pointing shadows), each indicating accumulation and demand-side control. The price action is less decisive, though, showing rising peaks but falling troughs.

7853 is the all-time high and the key historical point of supply. Watch the price action closely at 7853. White bodies indicates little supply impeding further gains, whereas black candles and or upward pointing shadows would be concerning.

I see plenty of demand between 7585 and the dynamic demand of the short term uptrend ribbon at 7716. As long as the price continues to close above the short term uptrend ribbon upside momentum is intact. I'd be very concerned about a close below 7585.

S&P 500

In a tweet this morning I considered some of the common phrases attached to this wonderful rally in US stocks.

Blatantly overvalued. Overextended/overbought. Irrational. Misjudging Fed rate cuts. Due to only 7 stocks.

Despite all of the above, I suggest only one phrase matters: Still going up!

This chart remains a picture of excess demand, and whilst this is the case, one can consider the path of least resistance is up.

You''ll know when supply has arrived. You'll see black candles and or upward pointing shadows as well as falling peaks and falling troughs. In this way, the technicals, not the hype, will tell you everything you need to know about the US bull market!

Lithium Carbonate Futures GFEX

Just a quick heads up here. I've been monitoring this chart in today's trading on GFEX which will finish just after I publish this Evening Wrap. The benchmark July contract is on track for a 5% decline and is at major risk of cracking below some very important points of demand.

I'll leave it there because I don't like to comment on live candles, and will come back to you with a comprehensive ASX lithium sector overview in a dedicated edition of ChartWatch tomorrow.

Economy

Today

• There were no major economic data announcements in our time zone today

Later this week

Tuesday

• 10:30 AUS Westpac Consumer Sentiment March (vs +6.2% February)

• 23:30 USA Core Durable Goods Orders February (+0.4% forecast vs -0.4% January)

Wednesday

• 01:00 USA Conference Board Consumer Confidence March (106.9 forecast vs +106.7 February)

• 11:30 AUS Consumer Price Index February (CPI) (+3.5% p.a. forecast vs +3.4% p.a. January)

Thursday

• 11:30 AUS Retail Sales February (+0.4% forecast vs +1.1% January)

Friday

• All day AUS Good Friday Holiday

• 23:30 USA Core PCE Price Index February (+0.3% forecast vs +0.4% January)

Saturday

• 02:30 USA Federal Reserve Chairman Powell speech at Monetary Policy Conference, in San Francisco

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Interesting Movers

Trading higher

• +25.6% McGrath (MEA) - McGrath enters into Scheme Implementation Deed

• +10.6% MMA Offshore (MRM) - MMA Offshore Enters Into Scheme Implementation Deed, rise is consistent with prevailing short and long term uptrends

• +9.0% KMD Brands (KMD) - Synchronised on market purchases by directors Bowman ($133k) and Daly ($86k)

• +5.9% Sovereign Metals (SVM) - No news, rise is consistent with prevailing short and long term uptrends

• +5.9% K&S Corporation (KSC) - No news, rise is consistent with prevailing short and long term uptrends

• +5.8% Beacon Lighting Group (BLX) - No news, rise is consistent with prevailing short and long term uptrends

• +5.0% West African Resources (WAF) - No news, rise is consistent with prevailing short term uptrend, long term trend transitioning to up

• +3.9% Megaport (MP1) - No news, rise is consistent with prevailing short and long term uptrends

• +3.9% Ramelius Resources (RMS) - No news, rise is consistent with prevailing short and long term uptrends

• +3.8% Pro Medicus (PME) - No news, rise is consistent with prevailing short and long term uptrends

• +3.7% Goodman Group (GMG) - No news, rise is consistent with prevailing short and long term uptrends

Trading lower

• -8.5% Jupiter Mines (JMS) - No news, pullback after last week's substantial rally

• -6.2% WA1 Resources (WA1) - New news, closed below short term uptrend ribbon

• -5.7% Lycopodium (LYL) - Ex-dividend $0.37 fully franked

• -5.4% Latin Resources (LRS) - Investor Presentation - Future Facing Commodities Conference, weaker lithium futures prices today, fall is consistent with prevailing short and long term downtrends

• -4.8% ALS (ALQ) - ALS to acquire full ownership and control of Nuvisan

• -4.4% Chalice Mining (CHN) - No news, fall is consistent with prevailing short and long term downtrends

• -4.4% Life360 (360) - No news, modest pull back after substantial rally

• -4.3% Wildcat Resources (WC8) - No news, weaker lithium futures prices today, fall is consistent with prevailing short and long term downtrends

• -4.0% Superloop (SLC) - No news, modest pull back after substantial rally

• -3.4% NRW Holdings (NWH) - Ex-dividend $0.065 fully franked

• -3.3% Liontown Resources (LTR) - No news, weaker lithium futures prices today, fall is consistent with prevailing short and long term downtrends

• -3.0% Arcadium Lithium (LTM) - No news, weaker lithium futures prices today, fall is consistent with prevailing short and long term downtrends

Broker Notes

• Australian Clinical Labs (ACL) retained at buy at Citi; Price Target: $3.35

• Alligator Energy (AGE) retained at buy at Bell Potter; Price Target: $0.10

• APM Human Services International (APM) downgraded to hold from buy at Jefferies; Price Target: $1.80

• Aroa Biosurgery (ARX) retained at add at Morgans; Price Target: $1.20

• Bendigo and Adelaide Bank (BEN) retained at sell at Citi; Price Target: $8.60

• BHP Group (BHP) retained at buy at Goldman Sachs; Price Target: $49.40

• Boss Energy (BOE) retained at buy at Bell Potter; Price Target: $6.34

• Bank of Queensland (BOQ) retained at sell at Citi; Price Target: $5.05

• Beach Energy (BPT) retained at buy at Bell Potter; Price Target: $1.90

• Centuria Industrial REIT (CIP) retained at Hold at Bell Potter; Price Target: $3.35

• Centuria Capital Group (CNI) retained at Hold at Bell Potter; Price Target: $1.70

• Cooper Energy (COE) retained at buy at Bell Potter; Price Target: $0.18

• Centuria Office REIT (COF) retained at Hold at Bell Potter; Price Target: $1.30

• Comet Ridge (COI) retained at buy at Bell Potter; Price Target: $0.26

• Conrad Asia Energy. (CRD) retained at buy at Bell Potter; Price Target: $1.85

• Carnarvon Energy (CVN) retained at outperform at Macquarie; Price Target: $0.28 from $0.25

• Dexus Convenience Retail REIT (DXC) retained at Buy at Bell Potter; Price Target: $3.00

• Dexus Industria REIT/Units (DXI) retained at Sell at Bell Potter; Price Target: $2.80

• Fisher & Paykel Healthcare (FPH)

  • Retained at underweight at Barrenjoey; Price target: NZ$21.50 from NZ$20.90

  • Retained at neutral at Citi; Price Target: NZ$26.25 from NZ$24.00

  • Retained at neutral at Macquarie; Price Target: NZ$26.30 from NZ$24.40

  • Upgraded to neutral from negative at E&P; Price Target: NZ$23.20

  • Upgraded to hold from underperform at Jefferies; Price Target: NZ$23.50 from NZ$21.00

  • Upgraded to sector perform from underperform at RBC Capital Markets; Price Target: NZ$23.00 from NZ$20.00

• GDI Property Group (GDI) retained at Buy at Bell Potter; Price Target: $0.75

• Healthco Healthcare and Wellness REIT (HCW) retained at Buy at Bell Potter; Price Target: $1.70

• Homeco Daily Needs REIT (HDN) retained at Hold at Bell Potter; Price Target: $1.30

• Hartshead Resources (HHR) retained at buy at Bell Potter; Price Target: $0.03

• Healius (HLS) retained at sell at Citi; Price Target: $1.10

• HMC Capital (HMC) retained at Hold at Bell Potter; Price Target: $7.05

• Integral Diagnostics (IDX) retained at hold at Citi; Price Target: $2.20

• Judo Capital Holdings (JDO) retained at sell at Citi; Price Target: $1.04

• Lotus Resources (LOT) retained at buy at Bell Potter; Price Target: $0.50

• Paladin Energy (PDN) retained at buy at Bell Potter; Price Target: $1.60

• Qualitas Real Estate Income Fund (QRI) retained at buy at Citi; Price Target: $1.60

• Retail Food Group (RFG) retained at buy at Shaw and Partners; Price Target: $0.10 from $0.12

• Rio Tinto (RIO) retained at buy at Goldman Sachs; Price Target: $138.30

• Sims (SGM) upgraded to buy from neutral at UBS; Price Target: $14.50 from $13.60

• Sonic Healthcare (SHL) retained at hold at Citi; Price Target: $31.00

• Strike Energy (STX) retained at buy at Bell Potter; Price Target: $0.32

• Webjet (WEB) retained at add at Macquarie; Price Target: $10.33 from $8.55 (correction of Friday's incorrectly displayed new target price of $13.33)

Scans

This article first appeared on Market Index on Monday 25 March.