Evening Wrap: ASX 200 dips as massive gains in Energy, Gold, Defence, and Critical Minerals stocks save the day

What a day! Phew! What a week. A new all-time high, but possibly that milestone was eclipsed by yesterday's and today's massive moves in the ASX Energy Sector (XEJ) (+4.7%).

As you likely already know, there's some stuff going on in the Middle East that's causing crude oil prices to shoot higher, dragging the likes of Woodside Energy (WDS) (+7.4%), Santos (STO) (+3.7%), and Karoon Energy (KAR) (+10.9%) with it.

Also on the Middle East events rocket ship today, was risk-off poster child Gold. The Gold Sub-index (XGD) (+4.2%) responded in kind with similar gains to its Energy counterpart, but defence stocks (naturally) and critical minerals stocks were also key areas of the ASX to hitch a ride.

But as is so often the case when it comes to markets, where there are mega-winners there are also mega-losers. The last thing Qantas Airways (QAN) (-4.9%) wants to see is higher oil prices!

To make sense of all the above, I have detailed technical analysis on the Nasdaq Composite, S&P/ASX 200, and Brent Crude Oil in today's ChartWatch.

Be sure to 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.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 17.7 points lower at 8,547.4, roughly mid-range, 0.26% from its session low and 0.35% from its high. In the broader-based S&P/ASX 300 (XKO) advancers lagged decliners by a conclusive (not in a good way) 87 to 194.

For the week, the XJO finished up 31.7 points or 0.37% higher, 0.37% from its intraweek low and a disappointing 1.07% from its intraweek high.

It wasn't all plain sailing in the Energy sector today, as can be seen from the table below, uranium stocks had another tough day. Below the table, you'll see why – another dip in the uranium price...📉

Major ASX Energy Stocks today:

Uranium Futures (Front month, back-adjusted) COMEX (click here for full size chart)

That's uranium's first close below the short term trend ribbon since 14 April. I know this section isn't ChartWatch, but with this latest move, and with the short term trend neutralised and the long term trend back to down, it looks a lot like uranium is rolling over again...⚠️

As mentioned in the opening blurb: In addition to energy, gold, defence and critical minerals were also very good today – no surprise given each is a theme consistent with heightened and rising geopolitical tensions. If you truly believe those tensions are about to subside anytime soon, then I propose:

1. You're kidding yourself; and

2. You could therefore conclude that we're close to the top of the strong gains in each of those 3 sectors

If on the other hand, you think we're going to see increased tensions between countries going forward, then perhaps the excellent trends in many stocks in those sectors can continue. I note that several dozen stocks across these themes have frequented ASX ChartWatch Scans Uptrends Scan lists over the last weeks and months.

But, as good as those deemed to be winners from developments of the last 24-hours were, most stocks prefer stability and lower energy prices to chaos and higher energy prices. As such, note those in the table below...

Today's Middle East fallout losers:

ChartWatch

NASDAQ Composite Index

An interesting chart (click here for full size image)

A better than expected outcome on Thursday (I was expecting modest down or sideways at best versus the decent-albeit-small demand-side showing compared to Wednesday’s supply-side candle).

However, with Comp futures down around 2% at the time of writing on the back of those Middle East developments, it may only be a stay of execution.

As bad as the journo’s are going to paint this one…my experience is that markets have a habit of shrugging of these kinds of events pretty quickly, so assuming that tonight we open low and close high – there shouldn’t be a great deal of impact from the news.

But that’s a BIG if! The open on the Comp is irrelevant tonight – the close is everything. We want to see buy the dip, not sell-and-then-sell-again. So, “Sell…no demand…then sell into the close” is just as bad as “Sell…feeble rally…sell that rally…and keep selling into the close” = ❌❌.

We want “Buy the dip-and-keep buying into the close” = ✅.

I propose tonight’s session will be one of the more important ones in recent history – certainly in the context of this fledgling bull market / nearly unhindered and unchallenged rally since the April low.

We know there’s going to be plenty of supply on the open – but how does the demand-side deal with it and how much ammunition does the supply-side have? 🤔

I don’t have the answers for you because I can’t tell the future. Shame that!

Nope, the answers will come by Saturday morning. Until then, there’s nothing on the chart above to tell me to do anything but stay the course on the Comp.

S&P/ASX 200 (XJO)

An interesting chart (click here for full size image)

Yesterday I spoke of that sick feeling one gets when the market is kinda doing exactly what it did before – and that thing it did before wasn’t great…🤢

The last 3 candles from the 8640 high are might have been similar to the 3 candles that commenced the Valentine’s Day correction…if not for that saving grace little downward pointing shadow today.

A smidge of buy the dip goes a long way on a Friday afternoon ahead of potentially massive exogenous risk events that could unfold over the weekend.

And ahead of the poor showing on US stock futures so far.

So, we take some hope into the week’s close – a week where we still eked out a new high. Talking about weeks, see the XJO weekly chart below. It’s worth considering given the new high.

ASX 200 (XJO) weekly chart (click here for full size image)

That last candle with its upward pointing shadow isn’t ideal, but it could be a harbinger of consolidation rather than a full-blown reversal. One thing that is clear: My trend ribbons appear to do just as good a job on the weekly chart as the daily chart – simply highlighting different areas of potential dynamic demand and supply.

In conclusion, if you can see undeniable and incontrovertible evidence in the charts above that the supply-side is in control of the XJO price – then you’re either better than me, about to get really lucky if there’s a major sell off, or just plain wrong. Staying the course here until I have a reason not to.

Brent Crude Oil Futures (Front month, back-adjusted) ICE

An interesting chart (click here for full size image)

A super-quick follow-up here tonight because we only just covered Brent in last night's rather timely ChartWatch.

In that update, we noted the improvement in the short and long term trends, but also that Brent remained largely rangebound overall and capped by 73.96-74.82 in the short term.

I said "An emphatic close above there would definitely make me change my tune."

Ok, I'm changing my tune...🎵🎶

Just a little! Because that last candle is still live, and therefore there's no guarantee Brent will close above the 73.96-74.82 supply zone. And even if it does, how big is that upward pointing shadow going to be? 🤔

Brent needs to nail that level, and nail it with a high close to be credible. Otherwise, all we've just witnessed is a bunch of shorts get toasted, and a heap of spec money #FOMO and #YOLO in at the top of the candle.

The latter will be a bunch of dead-wood supply overhanging higher prices for some time.

If Brent and re-fill that last candle, i.e., paint it full-white...then, yes, it's likely 'on' here, and things will get very interesting for Brent. The problem with this is that things could also get very ugly for other markets like stocks ⚠️.

Alternatively, if the close of the current candle shows a long upward pointing shadow and or a close below 73.96, the recent rally could stall at best, or fizzle quickly at worst.

Again, Saturday morning will tell!

Economy

Today

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

Later this week

Saturday

• 00:00 USA Prelim UoM Consumer Sentiment June (52.5 forecast vs 52.2 in May)

• 00:00 USA Prelim UoM Inflation Expectations June (+6.6% p.a. previous)

Latest News

Interesting Movers

Trading higher

• +10.9% Karoon Energy (KAR) – No news, general strength across the broader Energy sector today, rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +10.2% Chalice Mining (CHN) – No news, general strength across the broader Critical Minerals sector today, rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up 🔎📈

• +8.1% Kingsgate Consolidated (KCN) – 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 🔎📈

• +7.8% BetaShares Crude Oil Index ETF-Currency Hedged ETF (OOO) – No news, general strength across the broader Energy sector today, crude oil ETF.

• +7.5% Electro Optic Systems (EOS) – No news, general strength across the broader Defence sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +7.4% Woodside Energy Group (WDS) – No news, general strength across the broader Energy sector today, rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up 🔎📈

• +7.0% Capricorn Metals (CMM) – 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% Bubs Australia (BUB) – No news, rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +6.4% Westgold Resources (WGX) – 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 🔎📈

• +6.2% Origin Energy (ORG) – No news, general strength across the broader Energy sector today, rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.9% Emerald Resources (EMR) – No news, general strength across the broader Gold sector today, rise is consistent with prevailing long term uptrend 🔎📈

• +5.8% 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 🔎📈

• +5.8% Newmont Corporation (NEM) – 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 🔎📈

• +5.5% Evolution Mining (EVN) – 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 🔎📈

• +5.1% Northern Star Resources (NST) – 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 🔎📈

• +4.9% Catalyst Metals (CYL) – 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 🔎📈

• +4.9% IDP Education (IEL) – No company specific news, but there are several substantial shareholder notices today from suspected short selling facilitators, so it could be a case of short sellers getting out.

• +4.7% Black Cat Syndicate (BC8) – No news, general strength across the broader Gold sector today, rise is consistent with prevailing long term uptrend 🔎📈

• +4.3% Bellevue Gold (BGL) – No news, general strength across the broader Gold sector today.

• +4.3% Vaneck Global Defence ETF (DFND) – No news, general strength across the broader Defence sector today, defence industry ETF, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +3.9% AGL Energy (AGL) – No news, general strength across the broader Energy sector today.

• +3.8% Lynas Rare Earths (LYC) – No news, general strength across the broader Critical Minerals sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +3.8% Austal (ASB) – No news, general strength across the broader Defence 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 🔎📈

• +3.7% Santos (STO) – Fitch affirms Santos' investment grade credit rating, general strength across the broader Energy sector today, rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up 🔎📈

Trading lower

• -24.7% Accent Group (AX1) – Trading Update, fall is consistent with prevailing short and long term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -20.3% Cettire (CTT) – Continued negative response to 12-Jun Trading Update and Ceasing to be a substantial holder , fall is consistent with prevailing short and long term downtrends, one of the most Featured (highest conviction) stocks in ChartWatch ASX Scans Downtrends list 🔎📉

• -12.1% Coronado Global Resources (CRN) – 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 🔎📉

• -10.8% Digitalx (DCC) – Becoming a substantial holder (likely unrelated to today's decline), more likely major cryptos pulled back overnight.

• -9.8% Trigg Minerals (TMG) – Net Zero Smelter Strategy Advances With Ex SPMP Executive.

• -9.3% Silex Systems (SLX) – No news, fall is consistent with prevailing long term downtrend 🔎📉

• -9.0% Dateline Resources (DTR) – No news, today's move is consistent with recent volatility.

• -7.7% Botanix Pharmaceuticals (BOT) – 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 🔎📉

• -7.7% Clarity Pharmaceuticals (CU6) – SABRE topline results, fall is consistent with prevailing short and long term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -7.6% EBR Systems (EBR) – 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 🔎📉

• -4.9% Qantas Airways (QAN) – No company specific news, seen as a loser from spiking crude oil prices.

Broker Moves

AIC Mines (A1M)

• Retained at Buy at Shaw and Partners; Price Target: $1.10

• Retained at Buy at Bell Potter; Price Target: $0.67

Aeris Resources (AIS)

• Retained at Buy at Bell Potter; Price Target: $0.35

ASX (ASX)

• Retained at Neutral at Citi; Price Target: $71.60 from $71.20

• Retained at Neutral at Macquarie; Price Target: $66.00 from $65.00

• Retained at Underweight at Morgan Stanley; Price Target: $57.80 from $56.15

• Retained at Neutral at Jarden; Price Target: $68.25 from $62.25

• Retained at Overweight at JPMorgan; Price Target: $71.50

• Retained at Sell at UBS; Price Target: $69.10 from $69.50

• Upgraded to Hold from Trim at Morgans; Price Target: $72.00 from $67.20

• Upgraded to Outperform from Hold at CLSA; Price Target: $77.60 from $65.20

Accent Group (AX1)

• Retained at Buy at UBS; Price Target: $2.45

• Retained at Outperform at RBC Capital Markets; Price Target: $1.90 from $2.50

• Retained at Overweight at Morgan Stanley; Price Target: $2.50

• Retained at Buy at Bell Potter; Price Target: $2.10 from $2.60

• Downgraded to Neutral from Overweight at Jarden; Price Target: $1.55 from $2.13

BHP Group (BHP)

• Retained at Neutral at UBS; Price Target: $40.00

Brazilian Rare Earths (BRE)

• Retained at Speculative buy at Ord Minnett; Price Target: $6.30

• Initiated at Buy at Argonaut Securities; Price Target: $4.20

CAR Group (CAR)

• Retained at Buy at Citi; Price Target: $42.00

Challenger (CGF)

• Retained at Buy at Citi; Price Target: $7.55

• Retained at Equal weight at Morgan Stanley; Price Target: $6.45

• Retained at Buy at UBS; Price Target: $9.15

Close the Loop (CLG)

• Retained at Hold at Shaw and Partners; Price Target: $0.10 from $0.50

Clover Corporation (CLV)

• Retained at Buy at UBS; Price Target: $0.68 from $0.60

Cochlear (COH)

• Retained at Hold at Ord Minnett; Price Target: $285.00

• Retained at Sector perform at RBC Capital Markets; Price Target: $309.00 from $312.00

• Retained at Positive at E&P; Price Target: $335.26

• Retained at Overweight at JPMorgan; Price Target: $305.00 from $311.00

• Retained at Underweight at Morgan Stanley; Price Target: $267.00

Cettire (CTT)

• Downgraded to Sell from Hold at Bell Potter; Price Target: $0.28 from $0.47

Endeavour Group (EDV)

• Initiated at Hold at Bell Potter; Price Target: $4.50

The Environmental Group (EGL)

• Retained at Buy at Bell Potter; Price Target: $0.38 from $0.37

Goodman Group (GMG)

• Initiated at Buy at Goldman Sachs; Price Target: $39.00

Iluka Resources (ILU)

• Initiated at Buy at Argonaut Securities; Price Target: $5.50

Lynas Rare Earths (LYC)

• Initiated at Hold at Argonaut Securities; Price Target: $7.50

Meteoric Resources NL (MEI)

• Initiated at Buy at Argonaut Securities; Price Target: $0.22

Neuren Pharmaceuticals (NEU)

• Retained at Buy at Bell Potter; Price Target: $20.00

Origin Energy (ORG)

• Initiated at Buy at Jefferies; Price Target: $12.05

Peninsula Energy (PEN)

• Retained at Hold at Shaw and Partners; Price Target: $1.00

Perseus Mining (PRU)

• Retained at Buy at UBS; Price Target: $4.20 from $4.40

• Retained at Outperform at Macquarie; Price Target: $4.00 from $3.80

PWR Holdings (PWH)

• Retained at Buy at Bell Potter; Price Target: $8.00 from $8.50

REA Group (REA)

• Retained at Neutral at Macquarie; Price Target: $265.00

Robex Resources Inc. (RXR)

• Retained at Speculative buy at Canaccord Genuity; Price Target: $5.00

Superloop (SLC)

• Retained at Buy at Citi; Price Target: $3.55

Talga Group (TLG)

• Retained at Speculative buy at Bell Potter; Price Target: $1.00 from $1.90

Telix Pharmaceuticals (TLX)

• Retained at Buy at UBS; Price Target: $36.00

Wagners Holding Company (WGN)

• Upgraded to Accumulate from Add at Morgans; Price Target: $2.10 from $2.00

Zip Co (ZIP)

• Retained at Buy at Citi; Price Target: $3.10 from $3.00

Scans