Evening Wrap: ASX 200 can't shake heavy selling as coal stocks WHC and NHC plunge, yet gold stocks surge

The S&P/ASX 200 closed 37.1 points lower, down 0.48%.

Good as gold 🥇. It's been one of the few stable investing themes amidst a maelstrom of Trump Trade War uncertainty. I have detailed reporting on the best of the ASX gold sector today – and there is plenty to discuss – as well as detailed technical analysis of the gold price in ChartWatch.

Elsewhere big banks and the major miners struggled, as did consumer stocks. But, some of the sharpest declines where reserved for coal stocks like New Hope Corporation (NHC) (-8.6%), Whitehaven Coal (WHC) (-5.8%), and Coronado Global Resources (CRN) (5.5%).

Click/scroll through for the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all the key upcoming economic data in tonight's Evening Wrap.

Also, I have detailed technical analysis on the NASDAQ Composite, the S&P/ASX 200 and Gold in today's ChartWatch.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 37.1 points lower at 7,749.1, 0.93% from its session high and just 0.03% from its low. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by a disappointing 121 to 150.

Good as gold 🥇. It's been one of the few stable investing themes amidst a maelstrom of Trump Trade War uncertainty. Gold has generally done well during such periods of investor nervousness, and it took another tentative step towards a new record high overnight and during Asian trade today. I have detailed technical analysis of the gold price for you in ChartWatch below.

As for ASX-listed gold stocks, whilst they've been moderately volatile of late – hardly inconsistent with the broader market – they enjoyed solid gains nearly across the board today as the Gold (XGD) sub-index rose 3.5%.

If you've been following my daily ChartWatch ASX Scans Uptrends lists, you'll no doubt be aware of the strong uptrends in the likes of today's sector leading performers: Rox Resources (ASX: RXL) (+14.2%), Ora Banda Mining (ASX: OBM) (+9.5%), Regis Resources (ASX: RRL) (+4.7%), Evolution Mining (ASX: EVN) (+4.0%), and Gold Road Resources (ASX: GOR) (+3.6%), among several others, that have been stalwarts of my uptrends lists for several months 📈.

Gold stocks were but rare glimmers of hope among a sea of red and black across the broader ASX today. Red ink in terms of daily price changes, and black candles in terms of price action. I have more analysis on the reasons and consequences of today's ASX 200 price action in ChartWatch below.

Hardest hit were consumer stocks (Consumer Staples (XSJ) (-0.94%) and Consumer Discretionary (XDJ) (-0.68%)), as a few ex-dividends came into play, but more generally and in keeping with a trend of recent weakness in these sectors – growing concerns over high valuations and slowing consumer spending.

Index points were sapped at the top end of town as the big banks (Financials (XFJ) (-0.65%)) continued to struggle, led by Westpac Banking Corp (ASX: WBC) (-1.5%), and as both mining majors BHP Group (ASX: BHP) (-1.8%) and Rio Tinto (ASX: RIO) (-1.0%) continued to lose ground (Resources (XJR) (-0.39%)).

Most interestingly, commodity prices weren't the problem for BHP and RIO today, with most base metals and iron ore nicely firmer overnight. They appear to simply be sagging under the weight of a desire among major fund managers to cut market exposure...full stop!

Commodity prices were an issue, however, for at least one segment of the Energy (XEJ) (-0.53%) sector. Both metallurgical and thermal coal prices were down sharply overnight, and this dragged on the likes of New Hope Corporation (ASX: NHC) (-8.6%), Whitehaven Coal (ASX: WHC) (-5.8%), Coronado Global Resources (ASX: CRN) (-5.5%). Some terrible downtrends there, and each of these has been a stalwart of my ChartWatch ASX Scans Downtrends lists for several months 📉.

ChartWatch

NASDAQ Composite Index

The next phase of the bull market starts with a single candle...could it be this one? 🤔 (click here for full size image)

Wednesday’s candle on the Comp was far from the most resounding demand-side display that you’ll see, but if anything, it was at least indicative of lesser supply-side control.

Beggars can’t be choosers in a market correction.

It sets a new static point of demand at 17238. If we can stay above there, then there’s hope. If not, this correction that now we are well and truly in threatens to develop into something far more sinister.

What that sinisterness could potentially grow into is best explained in an article I wrote yesterday on how the major bear markets of the last 50 years developed – it is compulsory reading for both budding and experienced technical analysts!

One of the key traits of each of those bear markets is that the long term trend ribbon – which almost unanimously in each case had so reliably cradled and supported the bull market on the way up – was cracked – and then transitioned to a zone of vicious excess supply.

We’ll just have to wait and see what happens at the long term trend ribbon from here. Fingers crossed we can close back above it quickly and get on with the prior bull market. Until then, we remain in what I have labelled as a NOT bull market phase.

White bodied candles and or downward pointing shadows from now and into the the long term trend ribbon would suggest we’re in good shape for a return to a bull market, whereas black bodied candles and or upward pointing shadows from now and into the ribbon would be deadly confirmation of what is starting to increasingly feel like the inevitable! 😭

S&P/ASX 200 (XJO)

The next phase of the bull market starts with a single candle...but it's not this one! 🤦 (click here for full size image)

What a great case study in how upward pointing shadows are formed.

No doubt, if you’ve been suffering through reading my ChartWatch updates for any length of time, you’ve heard me bang on about supply-side candles – black bodies and upward pointing shadows.

Enough with the upward pointing shadows, Carl! What’s the big deal about a line sticking out of a box on a chart…a few measly pixels…how can they possibly mean anything? 🤷

I hear you say.

There’s an old saying that repetition is the mother of all learning. It certainly is the case in my experience.

I was also taught by a mentor about 20 years ago that consistency is the key to successful trading.

Hence, whilst I concede I might be both boring and repetitious in these ChartWatch updates – you must also concede that I am nothing but consistent.

Today’s price action tells us exactly why upward pointing shadows are so important in our technical analysis – and why they are so foreboding in terms of signalling excess supply lurking in the system – ready to beat down any fledgling price rally.

If want to sell, and you have plenty to sell, you least want to do this when prices are cascading on thin volumes. Sometimes you may have no choice (that’s when prices will really be in free-fall), but you’d rather sell into the opposite of this, i.e., rising prices and solid volumes.

This is the whole premise behind sell the rally. Big funds who have plenty of stock to offload prefer to do this as speculative buying is coming in (perhaps because the Comp finally bounced last night) and or shorts are covering some back (for the same reason, or because they’re just taking some risk off the table – remember short covering is part of demand).

That buying creates a white bodied candle on the open. This buying is met by the latent supply that is targeting higher prices and liquidity – then it is overwhelmed (because the buying is not coming from anyone important) – and as prices fall back it creates the upward pointing shadow on the session’s candle. (If the price subsequently should close below its open it will also create a black body on the candle).

I like to say that a candle’s shadow points to excess demand / latent demand or excess supply / latent supply:

Downward pointing shadows point to where excess demand / latent demand was lurking in the system, waiting to buy the dip, eventually overwhelming prevailing supply and pushing the price back up after the early sell off.

Upward pointing shadows point to where excess supply / latent supply was lurking in the system, waiting to sell the dip, eventually overwhelming prevailing demand and pushing the price back down after the early pop up.

Today it was the latter.

And that means we’re in a market where the big money views price rises as an opportunity to get out at better prices and liquidity. It’s the opposite of what we’d expect in a healthy demand-side market.

Today’s price action is made even more concerning given the early rally was so feeble in the first place – there wasn’t a great deal of demand coming in early to start with – and the supply side didn’t wait long to knock it on the head.

Unless something amazing happens in the US tonight (can it? 🤔), then I can’t see anything in the trends, price action, or candles here to suggest we don’t have a date with 7628.

Even if we somehow managed to stage a turnaround from here, then there’s likely to be a wall of latent supply looking to take advantage of higher prices (and recent buy the dip mistakes --- arrggghhh it keeps dipping! 😱).

In this regard, I expect the long term / short term trend ribbons to act as a major combined zone of excess supply. Presently this zone kicks in around 8070 and extends up to 8200.

Hey – if we can close above there – I’ll revert back to the biggest bull in town. Until then, and without the requisite demand-side candles and rising peaks and troughs – I grow more bearish each day.

Gold Futures (Front month, back-adjusted) COMEX

Green as far as the eye can see! 🟩🟩👀 (click here for full size image)

Too much black and pink! Let's change gears to one of the few double green trends remaining in global markets – gold.

Solid, very solid. That last little dip from 2974 terminated at a logical zone of demand – the confluence of the short term uptrend ribbon and the 2849.5-2855 static zone of demand.

I like it when things make sense – it gives me confidence in the prevailing trend and that market participants are behaving in line with the implied market imbalance. In this case it is an imbalance of demand > supply and of increased probability the gold price continues to rise rather than the alternatives.

2974 must be dealt with, however, and preferably with an emphatic demand-side candle to signal the demand-side remains gripped by FOMO and the supply side continues to hold onto their gold for dear life!

In line with discussions above on the Comp and XJO, we would not want to see any long upward pointing shadows into the key point of supply as this would indicate the supply side is more inclined to take advantage of that demand-side FOMO and liquidity and to let them have it in spades! Back up the truck...they're piling in...🚛!!!

Let's hope not!

Economy

Today

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

Later this week

Friday

• 22:00 USA Prelim UoM Consumer Sentiment March (63.8% forecast vs 64.7 in February)

• 22:00 USA Prelim UoM Inflation Expectations March (+4.3% p.a. in February)

Latest News

Interesting Movers

Trading higher

• +22.5% Energy Transition Minerals (ETM) - Response to ASX Price Query, rise is consistent with prevailing short and long term uptrends 🔎📈

• +16.4% Antipa Minerals (AZY) - No news, general strength across the broader Gold sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +14.3% Rox Resources (RXL) - No news, general strength across the broader Gold sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +12.2% Syrah Resources (SYR) - No news, (a few beaten down battery materials stocks caught a bid today, spec buyer accumulating or short covering…🤔).

• +11.3% Silver Mines (SVL) - Drilling Commenced at Elsienora Project, general strength across the broader Gold sector today.

• +10.9% Droneshield (DRO) - Change in substantial holding, (Regal Funds Management increase to 83.31% from 7.22%), rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up 🔎📈

• +9.9% Ora Banda Mining (OBM) - Outstanding Exploration Results at Little Gem, general strength across the broader Gold sector today, rise is consistent with prevailing short and long term uptrends, one of the most Featured (highest conviction) stocks in ChartWatch ASX Scans Uptrends list 🔎📈

• +9.7% Wellard (WLD) - WLD Shareholder Meeting Chairmans Letter and Return of Capital - WLD, rise is consistent with prevailing short and long term uptrends 🔎📈

• +9.2% Novonix (NVX) - NVX Receives Approval for Purchase of Enterprise South Land, (a few beaten down battery materials stocks caught a bid today, spec buyer accumulating or short covering…🤔).

• +9.1% Andean Silver (ASL) - No news since 12-Mar Geophysics Uncovers Extended Mineralisation at Sinter Hill, general strength across the broader Gold sector today, bounced perfectly from long term uptrend ribbon!

• +8.2% Westgold Resources (WGX) - Change of Director's Interest Notice - W. Bramwell, (on market trade to acquire 10,000 shares at a price of $2.48 per share).

• +7.2% Larvotto Resources (LRV) - No news, general strength across the broader Gold sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +6.7% MTM Critical Metals (MTM) - MTM Partnership with Vedanta Ltd on Aluminum Waste, bounced perfectly from long term uptrend ribbon!

• +6.5% IDP Education (IEL) - No news, small rally within the context of the massive decline experienced over last 18 months.

• +5.8% Bellevue Gold (BGL) - No news, general strength across the broader Gold sector today.

• +5.6% Spartan Resources (SPR) - No news, general strength across the broader Gold sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +5.4% Austal (ASB) - No news, rebounded after yesterday's sharp sell-off due to $200m Institutional Placement - investor presentation.

• +5.4% Capricorn Metals (CMM) - Acquisition of Kings Find Project, general strength across the broader Gold sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +5.2% Genesis Minerals (GMD) - No news, general strength across the broader Gold sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

Trading lower

• -22.2% Silk Logistics (SLH) - DP World Australia's acquisition of Silk raises concerns and Scheme Update - ACCC Releases Statement of Issues.

• -12.6% Yancoal Australia (YAL) - No news, ex-div $0.52 fully franked largely to blame, but also possibly some of it due to sharply lower coal prices overnight.

• -8.6% New Hope Corporation (NHC) - No news, coal prices sharply lower overnight, fall is consistent with prevailing short and long term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -8.0% McMillan Shakespeare (MMS) - No news, ex-div $0.71 fully franked explained some of today's fall, fall is consistent with prevailing long term downtrend 🔎📉

• -7.3% Inghams Group (ING) - No news, ex-div $0.11 fully franked.

• -6.4% Regal Partners (RPL) - No news, fall is consistent with prevailing short and long term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -5.8% Whitehaven Coal (WHC) - No news, coal prices sharply lower overnight, fall is consistent with prevailing short and long term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -5.5% Coronado Global Resources (CRN) - No news, coal prices sharply lower overnight, fall is consistent with prevailing short and long term downtrends, one of the most Featured (highest conviction) stocks in ChartWatch ASX Scans Downtrends list 🔎📉

• -5.4% DigiCo REIT (DGT) - No news, fall is consistent with prevailing short and long term downtrends, a recent regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -4.7% Audinate Group (AD8) - No news, retained at underweight at Macquarie and price target cut to $6.30 from $8.70, fall is consistent with prevailing short and long term downtrends, one of the most Featured (highest conviction) stocks in ChartWatch ASX Scans Downtrends list 🔎📉

• -4.3% Perpetual (PPT) - No news, ex-div $0.61 unfranked explained some of today's fall, fall is consistent with prevailing short and long term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -3.9% Myer (MYR) - No news, fall is consistent with prevailing short term downtrend and long term trend is transitioning from up to down, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -3.8% Cettire (CTT) - No news, fall is consistent with prevailing short and long term downtrends, one of the most Featured (highest conviction) stocks in ChartWatch ASX Scans Downtrends list 🔎📉

• -3.6% Kogan.Com (KGN) - No news, ex-div $0.07 fully franked explained some of today's fall, fall is consistent with prevailing short and long term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -3.3% OFX Group (OFX) - No news, fall is consistent with prevailing short and long term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -3.1% Reliance Worldwide Corporation (RWC) - No news, fall is consistent with prevailing short term downtrend and long term trend is transitioning from up to down, a recent regular in ChartWatch ASX Scans Downtrends list 🔎📉

Broker Moves

• The A2 Milk Company (A2M)

  • Downgraded to neutral from positive at E&P; Price Target: $7.99

• Audinate Group (AD8)

  • Retained at underweight at Macquarie; Price Target: $6.30 from $8.70

• Amplitude Energy (AEL)

  • Upgraded to outperform from sector perform at RBC Capital Markets; Price Target: $0.280 from $0.230

• Alkane Resources (ALK)

  • Retained at buy at Bell Potter; Price Target: $1.200 from $1.250

• Austal (ASB)

  • Retained at buy at Bell Potter; Price Target: $4.45 from $4.70

• ASX (ASX)

  • Upgraded to overweight from neutral at JP Morgan; Price Target: $68.00 from $65.00

• Australian Vanadium (AVL)

  • Retained at buy at Shaw and Partners; Price Target: $0.060

• Bega Cheese (BGA)

  • Upgraded to positive from neutral at E&P; Price Target: $6.00

• BHP Group (BHP)

  • Retained at buy at Goldman Sachs; Price Target: $47.30 from $47.40

• Boss Energy (BOE)

  • Retained at buy at Canaccord Genuity; Price Target: $5.35

• Conrad Asia Energy (CRD)

  • Retained at buy at Bell Potter; Price Target: $1.600 from $1.900

• DigiCo REIT (DGT)

  • Retained at buy at Goldman Sachs; Price Target: $5.80

• Elders (ELD)

  • Retained at buy at Bell Potter; Price Target: $9.40 from $9.45

• Fletcher Building (FBU)

  • Downgraded to sell from neutral at Goldman Sachs; Price Target: $2.85

• Fortescue (FMG)

  • Retained at buy at Ord Minnett; Price Target: $21.00

• HMC Capital (HMC)

  • Upgraded to overweight from underweight at Jarden; Price Target: $8.65 from $9.95

• Imdex (IMD)

  • Retained at hold at Bell Potter; Price Target: $2.75 from $2.70

• James Hardie Industries (JHX)

  • Retained at buy at Goldman Sachs; Price Target: $59.45

• Laramide Resources (LAM)

  • Retained at buy at Canaccord Genuity; Price Target: $1.250

• Lotus Resources (LOT)

  • Retained at buy at Canaccord Genuity; Price Target: $0.340 from $0.370

• Lovisa (LOV)

  • Upgraded to positive from neutral at E&P; Price Target: $28.36 from $29.62

• Meteoric Resources (MEI)

  • Retained at buy at Ord Minnett; Price Target: $0.200

• Nextdc (NXT)

  • Retained at buy at Goldman Sachs; Price Target: $17.10

• Orica (ORI)

  • Retained at neutral at Citi; Price Target: $19.00

  • Retained at outperform at CLSA; Price Target: $22.00 from $21.50

  • Retained at outperform at Macquarie; Price Target: $20.91

  • Retained at overweight at Morgan Stanley; Price Target: $22.50

  • Retained at add at Morgans; Price Target: $20.10 from $19.72

  • Retained at buy at Ord Minnett; Price Target: $22.00

  • Retained at outperform at RBC Capital Markets; Price Target: $21.25 from $23.00

  • Retained at buy at UBS; Price Target: $22.00 from $21.00

• Premier Investments (PMV)

  • Retained at neutral at Macquarie; Price Target: $21.60 from $29.00

• Pantoro (PNR)

  • Retained at buy at Canaccord Genuity; Price Target: $0.190

  • Downgraded to hold from buy at Moelis Australia; Price Target: $0.150

• Reece (REH)

  • Retained at sell at Goldman Sachs; Price Target: $16.80 from $19.50

• Rio Tinto (RIO)

  • Retained at buy at Goldman Sachs; Price Target: $143.50 from $143.70

• Ramelius Resources (RMS)

  • Downgraded to accumulate from buy at Ord Minnett; Price Target: $2.35 from $2.90

• Reliance Worldwide Corporation (RWC)

  • Retained at buy at Goldman Sachs; Price Target: $6.00

• SGH (SGH)

  • Retained at buy at Goldman Sachs; Price Target: $59.30

• Westpac Banking Corporation (WBC)

  • Retained at underweight at Morgan Stanley; Price Target: $27.30 from $29.20

Scans