ASX 200 nails another record in broad-based rally, gold stocks shine again

Today in Review

Markets

The S&P/ASX200 (XJO) finished 30.2 points higher at 7,763.7, 0.57% from its session low and just 0.04% from its high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by a whopping 205 to 67. Both factors are important because broad-based moves which close at the high of the session are more likely to be sustainable.

The Gold (XGD) (+1.8%) sub-index was the best performing sector today as the gold price continues to edge further into record territory.

Also doing well today was the Industrials (XNJ) (+1.3%) sector. It benefited from strong moves in (Dr. Evil air quotes) "space laser" company Electro Optic Systems Holdings (EOS) (+6.5%) which might be benefiting from its impending addition to the All Ordinaries index, and building products company GWA Group (GWA) (+4.9%) which impressed investors at its strategy day.

Doing it tough today was the Resources (XJR) (-0.3%) sector which is even more ignominious considering the performance of gold stocks, part of the sector, which would have trimmed sector losses. Rio Tinto (RIO) (-2.4%) likely did the most damage in terms of sector points, but fellow major BHP Group (BHP) (-1.1%) probably wasn't far behind.

ChartWatch

The S&P/ASX200 (XJO)

Records are indeed made to be broken, and today's move fits nicely within the prevailing technnicals. Short and long term uptrends, tick. Higher peaks and higher troughs, tick. Predominantly demand-side candles, tick.

Each tick represents a key pillar in my model which aims to identify strong signs of either excess demand (bullish) or excess supply (bearish). Obviously the current technicals are all signs of excess demand, and this bodes well for the potential sustainability of the prevailing uptrends.

But, "potential" is the key word. All of my analysis is based upon historical price action. It's history, and some would argue ancient history. But good technical analysis does not seek to predict – because predicting the future is impossible.

So I don't try. I simply react to the next candle, and the next, based upon how it tells the story of changing demand-supply dynamics. Rest assured, when I see the stuff in the above chart which suggests the supply-side is grappling control of the S&P/ASX200's price, I will definitely let you know!

Until then, long live the bull market!

Economy

Today

• China Trade Balance January-February

  • Surplus CNY 890 billion vs forecast CNY 620 billion & previous CNY 540.90 billion

  • Exports +7.1% year on year (yoy) vs forecast +1.9% yoy equals a big beat and suggests stronger than expected global demand

  • Imports +3.5% yoy vs forecast +1.5% yoy equals solid beat and suggests stronger than expected demand within China

Later this week

• Friday

  • 00:15 ECB Meeting & Monetary Policy Statement (forecast no change at 4.5%)

  • 02:00 US Federal Reserve Chairman Jerome Powell semiannual monetary policy testimony to a House committee

• Saturday

  • 00:30 US Non-Farm Employment Change February (forecast +198K vs 353K January), Unemployment Rate (forecast 3.7% vs 3.7% January), & Average Hourly Earnings (forecast +0.2% vs +0.6% January)

  • 12:30 CHN Consumer Price Index (CPI) February (forecast +0.3% vs -0.8% January)

  • 12:30 CHN Producer Price Index (PPI) February (forecast -2.5% vs -2.5% January)

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Interesting Movers

Trading higher

• +11.1% Ioneer (INR) - No news 🤔 rally conintued in select few lithium & battery metals stocks

• +9.9% Chalice Mining (CHN) - No news 🤔 rally conintued in select few lithium & battery metals stocks

• +9.7% Mesoblast (MSB) - No news 🤔

• +8.1% Immutep (IMM) - No news, continued positive response to Tuesday's First Clinical Data announced from 90mg Dosing of Efti

• +7.7% Zip Co (ZIP) - No news, upgraded to buy from neutral at UBS & price target increased from $0.36 to $1.43, rise is consistent with prevailing short and long term uptrends

• +6.8% Resolute Mining (RSG) - No news, broad-based gold sector rally continues

• +6.4% Alkane Resources (ALK) - No news, broad-based gold sector rally continues

• +5.9% Perseus Mining (PRU) - No news, broad-based gold sector rally continues

• +5.5% Resmed Inc (RMD) - No ASX news announcement, launched new sleep apnea mask, rise reflects similar rally in NYSE listing Wednesday

• +5.0% Megaport (MP1) - No news, rise is consistent with prevailing short and long term uptrends

Trading lower

• -7.3% Helia Group (HLI) - No news, continuation of short term downtrend and of negative response to company's Full Year Results released last week

• -5.4% Platinum Asset Management (PTM) - Funds Under Management - February 2024

• -4.3% Core Lithium (CXO) - No news, fall is consistent with prevailing short and long term downtrends

• -4.2% Universal Store Holdings (UNI) - No news, ex-dividend $0.165 fully franked

• -3.5% Telix Pharmaceuticals (TLX) - No news, continued negative response to Tuesday's Telix to Acquire ARTMS (Isotope Production Platform)

• -3.4% Cromwell Property Group (CMW) - No news, fall is consistent with prevailing short and long term downtrends

Broker Notes

• Atlantic Lithium (A11) retained at outperform at Macquarie; Price Target: $0.56

• AGL Energy (AGL) retained at neutral at Macquarie; Price Target: $9.60

• Argosy Minerals (AGY) retained at neutral at Macquarie; Price Target: $0.11

• Aurelia Metals (AMI) retained at outperform at Macquarie; Price Target: $0.22

• ANZ Group (ANZ) retained at neutral at UBS; Price Target: $25.00

• Arena REIT (ARF) upgraded to overweight from neutral at Barrenjoey; Price Target: $3.75

• Accent Group (AX1) upgraded to neutral from sell at UBS; Price Target: $2.05 from $1.95

• Bega Cheese (BGA) retained at neutral at UBS; Price Target: $4.10 from $3.50

• Clarity Pharmaceuticals (CU6) retained at buy at Bell Potter; Price Target: $3.90 from $3.00

• Core Lithium (CXO) retained at neutral at Macquarie; Price Target: $0.20

• Downer EDI (DOW) retained at neutral at Macquarie; Price Target: $4.90

• Global Lithium Resources (GL1) retained at outperform at Macquarie; Price Target: $0.70

• Galan Lithium (GLN) retained at outperform at Macquarie; Price Target: $0.95

• Hastings Technology Metals (HAS) retained at neutral at Macquarie; Price Target: $0.62

• IGO (IGO)

  • Retained at outperform at Macquarie; Price Target: $8.60

  • Downgraded to sell from neutral at UBS; Price Target: $7.65 from $7.50

• Iluka Resources (ILU) retained at neutral at Macquarie; Price Target: $7.60

• Loyal Lithium (LLL) retained at neutral at Macquarie; Price Target: $0.50

• Arcadium Lithium (LTM) retained at outperform at Macquarie; Price Target: $11.00

• Liontown Resources (LTR)

  • Retained at neutral at Macquarie; Price Target: $1.00

  • Downgraded to neutral from buy at UBS; Price Target: $1.40 from $1.25

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

• Meteoric Resources (MEI) retained at outperform at Macquarie; Price Target: $0.46

• Maas Group Holdings (MGH) retained at outperform at Macquarie; Price Target: $4.55

• Mineral Resources (MIN) retained at outperform at Macquarie; Price Target: $75.00

• Monadelphous Group (MND) retained at outperform at Macquarie; Price Target: $15.10

• NRW Holdings (NWH) retained at neutral at Macquarie; Price Target: $2.70

• Piedmont Lithium Inc (PLL) retained at outperform at Macquarie; Price Target: $0.40

• Pilbara Minerals (PLS)

  • Retained at outperform at Macquarie; Price Target: $4.40

  • Retained at sell at UBS; Price Target: $2.60 from $2.50

• Patriot Battery Metals (PMT) retained at outperform at Macquarie; Price Target: $2.10

• Stockland (SGP) retained at buy at Citi; Price Target: $5.20

• Santana Minerals (SMI) retained at buy at Bell Potter; Price Target: $1.90 from $1.70

• Service Stream (SSM) retained at outperform at Macquarie; Price Target: $1.25

• Sayona Mining (SYA) retained at neutral at Macquarie; Price Target: $0.04

• Ventia Services Group (VNT) retained at outperform at Macquarie; Price Target: $4.00 from $3.75

• Worley (WOR) retained at outperform at Macquarie; Price Target: $18.10

• Zip Co (ZIP) upgraded to buy from neutral at UBS; Price Target: $0.36 from $1.43

Scans

This article first appeared on Market Index on 7 March 2024.