Market Wraps

Evening Wrap: ASX 200 dips on resources and energy stocks, Telstra gain helps limit losses

Wed 10 Jul 24, 5:35pm (AEST)

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Commodities in article

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The S&P/ASX 200 closed 12.9 points lower, down 0.17%.

It was another one of "those" quiet sessions on the ASX. The one's that occur after we've had a very good day (like yesterday) where investors are trying to figure out if they really want to take that next step and have a crack at a new all time high.

Not today, it seems.

Maybe tomorrow. 🀞

There were a bunch of interesting moves, mainly at the small end if you're looking for gains. At the bigger end of town, it was all about Telstra and the brokers' response to yesterday's pricing update.

Resources and Energy stocks slumped again. It's death by a thousand cuts there...

As usual, for all of these moves and plenty more...

Let's dive in!


Today in Review

Wed 10 Jul 24, 4:40pm (AEST)

Name Value % Chg
Major Indices
ASX 200 7,816.8 -0.17%
All Ords 8,058.3 -0.21%
Small Ords 2,982.3 -0.31%
All Tech 3,109.7 +0.00%
Emerging Companies 2,158.0 +0.16%
Currency
AUD/USD 0.6742 +0.01%
US Futures
S&P 500 5,633.75 +0.04%
Dow Jones 39,578.0 -0.05%
Nasdaq 20,708.0 +0.14%
Name Value % Chg
Sector
Communication Services 1,524.6 +1.44%
Consumer Staples 12,422.9 +0.25%
Financials 7,712.9 +0.21%
Real Estate 3,603.2 +0.16%
Industrials 6,800.4 +0.14%
Consumer Discretionary 3,562.0 +0.08%
Health Care 44,006.0 -0.14%
Information Technology 2,337.7 -0.17%
Energy 10,237.2 -0.64%
Utilities 9,052.8 -1.18%
Materials 17,016.7 -1.20%

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Markets

XJO Intraday Chart 10 July 2024
ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 12.9 points lower at 7,816.8, 0.45% from its session low and just 0.17% from its high. In the broader-based S&P/ASX 300 (XKO), advancers narrowly lagged decliners by 120 to 144.

The Communication Services (XTJ) (+1.4%) sector was the best performing sector today, likely in response to another strong gain in major constituent Telstra Group (ASX: TLS) (+2.4%). It's Mobile Pricing Update announcement yesterday received a generally warm reception from the major brokers (see Broker Moves for full details).

That was pretty much it! Apart from the TLS driven XTJ, those sectors that were up today only eked out their gains. Similarly, though, for the most part it was a similar story with losing sectors – generally only modest declines with a few ignominious performances.

No surprise to anyone reading this, Resources (XJR) (+1.19%) and Energy (XEJ) (-0.65%) were among those ignominious performances! They were split by Utilities (XUJ) (-1.18%) which has a decent number of Energy-like stocks anyways. Base metals and key crude oil contracts were generally lower overnight. Lithium minerals saw renewed falls today.

Commodity

Last Price

Change $

Change %

1mo %

1yr %

Aluminium - LME Official Cash

$2468.50

-$

-0.3%

-1.9%

+17.4%

Copper - LME Official Cash

$9762

-$46

-0.5%

+0.7%

+17.9%

Iron Ore CFR China 62pct Fe Spot

$110.51

+$0.49

+0.4%

+1.9%

-0.3%

Nickel - LME Official Cash

$16980

-$150

-0.9%

-4.8%

-19.7%

Lead - LME Official Cash

$2155

-$52.5

-2.4%

+1.3%

+4.7%

Tin - LME Official Cash

$34325

-$125

-0.4%

+8.3%

+18.2%

Zinc - LME Official Cash

$2872

-$54

-1.8%

+4.1%

+21.4%

Lithium Carbonate 99.5pct Battery Grade RMB/mt

$90350

-$100

-0.1%

-10.6%

-71.2%

Spodumene Concentrate 6pct ($US/t)

$930

-$10

-1.1%

-19.1%

0%

Silver/U.S. Dollar Spot Rate

$30.79

+$0.06

+0.2%

+3.6%

+22.9%

Gold/U.S. Dollar Spot Rate

$2363.57

+$5.16

+0.2%

+2.3%

+19.5%

Commodity price moves last 24 hours

Looking at the list below, it was an uninspiring day in Resources and Energy stocks to say the least. Adding to Energy's woes, coal stocks came off the boil, each logging a modest pullback from its recent strong rally.

Company

Last Price

Change $

Change %

1mo %

1yr %

Latin Resources (LRS)

$0.155

-$0.015

-8.8%

-31.1%

-50.8%

Chalice Mining (CHN)

$1.245

-$0.055

-4.2%

-15.9%

-79.8%

Yancoal Australia (YAL)

$7.17

-$0.29

-3.9%

+16.4%

+54.2%

Champion Iron (CIA)

$6.23

-$0.21

-3.3%

-5.6%

+10.3%

Whitehaven Coal (WHC)

$8.71

-$0.26

-2.9%

+12.8%

+31.8%

Lynas Rare Earths (LYC)

$6.23

-$0.18

-2.8%

-5.0%

-12.1%

Alumina (AWC)

$1.715

-$0.045

-2.6%

-1.4%

+28.0%

Deterra Royalties (DRR)

$3.96

-$0.1

-2.5%

-11.6%

-12.6%

Nickel Industries (NIC)

$0.810

-$0.02

-2.4%

-12.0%

-6.4%

Pilbara Minerals (PLS)

$2.94

-$0.07

-2.3%

-16.2%

-39.8%

Iluka Resources (ILU)

$6.53

-$0.15

-2.2%

-5.6%

-41.5%

South32 (S32)

$3.64

-$0.08

-2.2%

-0.8%

-0.8%

Sandfire Resources (SFR)

$8.96

-$0.18

-2.0%

+0.7%

+57.7%

Mineral Resources (MIN)

$55.49

-$0.83

-1.5%

-16.6%

-17.7%

BHP Group (BHP)

$43.17

-$0.57

-1.3%

-1.3%

-0.1%

Fortescue (FMG)

$21.59

-$0.27

-1.2%

-8.5%

-0.4%

Rio Tinto (RIO)

$119.37

-$1.23

-1.0%

-2.9%

+6.8%

It was an uninspiring day in Resources and Energy stocks

ChartWatch

Spodumene Concentrate Index (SMM), Platts Spodumene 6% (S&P Global)

spodumene concentrate indexspodumene concentrate platts 6 pct
Lithium minerals are bumping along the bottom...

The last time we covered lithium minerals was in ChartWatch in the Evening Wrap on 27 June.

Another day, and another loss for the SMM Spodumene Concentrate Index. Today's 0.8% decline marked the 45th trading session without an uptick. The other main pricing touchpoint for spodumene, Platts Spodumene 6%, is also showing a steady short term downtrend, dipping yesterday to US$930/t.

Note, the Platts update typically comes in around 8pm Sydney time, and I routinely update prices and charts for it and each of the other main lithium contracts in my X/Twitter feed each evening.

You've heard me talk about the importance of a V-shaped rally when it comes to punctuating the end of a protracted long term downtrend. Certainly, lithium minerals check the "protracted long term downtrend" box, but as you can also see, there has been no V-shaped rally (focus on the SMM Spodumene Concentrate Index chart as I have far greater data).

Instead, its a case of "bump along the bottom", and those can last for 18 months to a few years in my experience. This is why I always prefer to go by the charts and trends, rather than what may appear to the eager eye as a compelling narrative!

Iron Ore 62% CFR China Futures (SGX)

Iron Ore 62- (Front month, back-adjusted) SGX chart 10 Jujly
Another super interesting chart

The last time we covered iron ore was in ChartWatch in the Evening Wrap on 3 July.

In that update were monitoring a fledgling but strong rally from 101.95 to the 114 point of supply. I described the chart as “Not as bad as it looked last time!”.

Points of supply should never be taken lightly in any well-established long term downtrend, of the likes presently experienced in iron ore. But, as with any point of supply always remember: They are only suspected points of supply – awaiting confirmation by price action.

In short, I prefer not to anticipate that a point may be supply, but rather, I wait to see which candles appear there.

Does supply eventually manifest itself at the predicted point of supply – therefore validating it? In this case, supply-side candles are those with black bodies and or upward pointing shadows

Alternatively, do we see demand-side candles at the predicted point of supply – therefore nullifying the point of supply? Demand-side candles are those with white bodies and or upward pointing shadows.

Looking the chart above, as promising as that rally from 101.95 was, it was stopped dead at the 114 point of supply with a clear supply-side candle. The next candle’s (8 July) upper shadow shows how the demand-side tried to respond early in that session, fighting back for a small rally – but also that supply flooded into settle the matter decisively by the session’s close.

I’d suggest the price action will continue to compress in the range between 101.95 (demand) and 114 (supply) here, with a general downward trend as defined by the long term downtrend ribbon.


Economy

Today

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

Later this week

Thursday

  • 00:00 USA Federal Reserve Chairman Jerome Powell testimony Day 2

  • 10:30 USA Core CPI June (forecast +0.2% m/m and +3.5% p.a. vs +0.2% m/m and +3.5% in May)

Friday

  • 10:30 USA Core PPI June (forecast +0.1% m/m and +2.0% p.a. vs +0.0% m/m and +1.8% in May)

Saturday

  • 00:00 USA Preliminary University of Michigan Consumer Sentiment July (67.0 forecast vs 68.2 in June)


Latest News


Interesting Movers

Trading higher

  • +23.1% Catalyst Metals (CYL) - Catalyst achieves full year production of 110koz (regular feature chart in ChartWatch ASX Scans uptrends list) πŸ”ŽπŸ“ˆ

  • +8.4% DUG Technology (DUG) - No news, rise is consistent with prevailing long term uptrend, closed back above short term trend ribbon, bouncing off long term uptrend ribbon πŸ”ŽπŸ“ˆ

  • +7.7% Meteoric Resources (MEI) - No news, small rally following sharp selling on the back of Monday's Caldeira's Scoping Study Confirms Exceptional Financials

  • +7.4% Catapult Group International (CAT) - No news, rise is consistent with prevailing short and long term uptrends (regular feature chart in ChartWatch ASX Scans uptrends list) πŸ”ŽπŸ“ˆ

  • +5.9% Imugene (IMU) - First patient dosed in Phase 1 bile tract cancer trial

  • +5.3% Qoria (QOR) - No news, rise is consistent with prevailing long term uptrend, closed back above short term trend ribbon, bouncing off long term uptrend ribbon πŸ”ŽπŸ“ˆ

  • +4.8% Aurelia Metals (AMI) - No news, rise is consistent with prevailing short and long term uptrends (regular feature chart in ChartWatch ASX Scans uptrends list) πŸ”ŽπŸ“ˆ

  • +4.3% Core Lithium (CXO) - No news, has been volatile since Monday's Production and Financial Position Update

  • +3.7% Spartan Resources (SPR) - Never Never and Pepper deliver exceptional assays (yesterday), rise is consistent with prevailing short and long term uptrends (regular feature chart in ChartWatch ASX Scans uptrends list) πŸ”ŽπŸ“ˆ

  • +3.1% The Star Entertainment Group (SGR) - No news πŸ€”

  • +3.0% Ingenia Communities Group (INA) - No news πŸ€”

  • +2.4% Telstra Group (TLS) - Several broker moves following yesterday's Telstra Announces Mobile Pricing Update (See Broker Moves section)

  • +2.0% Megaport (MP1) - No news, initiated at outperform at CLSA with a price target of $15.10 (See Broker Moves section)

Trading lower

  • -9.3% Electro Optic Systems (EOS) - No news πŸ€”

  • -8.8% Latin Resources (LRS) - No news, fall is consistent with prevailing short and long term downtrends (regular feature chart in ChartWatch ASX Scans downtrends list) πŸ”ŽπŸ“‰

  • -7.2% Insignia Financial (IFL) - Response to ASX Price Query

  • -4.5% Orora (ORA) - No news, fall is consistent with prevailing short and long term downtrends (regular feature chart in ChartWatch ASX Scans downtrends list) πŸ”ŽπŸ“‰

  • -4.4% Regal Partners (RPL) - Completion of Acquisition of Merricks Capital

  • -4.4% Botanix Pharmaceuticals (BOT) - No news πŸ€”

  • -4.2% Chalice Mining (CHN) - No news, fall is consistent with prevailing short and long term downtrends (regular feature chart in ChartWatch ASX Scans downtrends list) πŸ”ŽπŸ“‰

  • -3.9% Yancoal Australia (YAL) - No news, pullback after recent strong rally


Broker Notes

Ampol (ALD)

  • Retained at outperform at Macquarie; Price Target: $37.00

Aristocrat Leisure (ALL)

  • Retained at outperform at Macquarie; Price Target: $55.00

APA Group (APA)

  • Retained at outperform at Macquarie; Price Target: $9.40

AUB Group (AUB)

  • Retained at outperform at Macquarie; Price Target: $33.84

Charter Hall Group (CHC)

  • Retained at outperform at Macquarie; Price Target: $15.54

Chorus (CNU)

  • Retained at outperform at Macquarie; Price Target: NZ$8.32

Coles Group (COL)

  • Retained at outperform at Macquarie; Price Target: $17.50

Capstone Copper Corp. (CSC)

  • Retained at outperform at Macquarie; Price Target: $12.80

CSL (CSL)

  • Retained at outperform at Macquarie; Price Target: $330.00

Curvebeam AI (CVB)

  • Retained at buy at Bell Potter; Price Target: $0.35 from $0.33

Goodman Group (GMG)

  • Retained at outperform at Macquarie; Price Target: $36.37

Graincorp (GNC)

  • Retained at outperform at Macquarie; Price Target: $9.60

Genusplus Group (GNP)

  • Retained at buy at Bell Potter; Price Target: $2.40 from $2.20

Hastings Technology Metals (HAS)

  • Retained at hold at Ord Minnett; Price Target: $0.36 from $0.28

Mirvac Group (MGR)

  • Retained at outperform at Macquarie; Price Target: $2.26

Megaport (MP1)

  • Initiated at outperform at CLSA; Price Target: $15.10

Macquarie Group (MQG)

  • Retained at underweight at Morgan Stanley; Price Target: $215.00

Nick Scali (NCK)

  • Retained at outperform at Macquarie; Price Target: $16.10

Orora (ORA)

  • Retained at outperform at Macquarie; Price Target: $2.45 from $2.62

Resimac Group (RMC)

  • Retained at buy at Bell Potter; Price Target: $1.30

Resmed Inc (RMD)

  • Retained at outperform at Macquarie; Price Target: $34.85

Regis Resources (RRL)

  • Upgraded to buy from hold at Argonaut Securities; Price Target: $2.40 from $2.00

  • Retained at outperform at RBC Capital Markets; Price Target: $3.10

South32 (S32)

  • Retained at outperform at Macquarie; Price Target: $4.50

Steadfast Group (SDF)

  • Retained at outperform at Macquarie; Price Target: $6.70

Seek (SEK)

  • Retained at buy at Ord Minnett; Price Target: $29.50

Sandfire Resources (SFR)

  • Retained at outperform at Macquarie; Price Target: $11.20

Santos (STO)

  • Retained at outperform at Macquarie; Price Target: $9.00

Telstra Group (TLS)

  • Retained at buy at Goldman Sachs; Price Target: $4.30 from $4.25

  • Retained at hold at Jefferies; Price Target: $4.00

  • Retained at overweight at JP Morgan; Price Target: $4.65

  • Upgraded to outperform from neutral at Macquarie; Price Target: $4.40 from $3.70

  • Retained at buy at Ord Minnett; Price Target: $4.50

  • Retained at buy at UBS; Price Target: $4.40

TPG Telecom (TPG)

  • Retained at neutral at UBS; Price Target: $4.80

West African Resources (WAF)

  • Retained at accumulate at Ord Minnett; Price Target: $1.60

Wesfarmers (WES)

  • Retained at overweight at Morgan Stanley; Price Target: $56.20

Whitehaven Coal (WHC)

  • Retained at outperform at Macquarie; Price Target: $9.00

Woolworths Group (WOW)

  • Retained at outperform at Macquarie; Price Target: $35.00

Xero (XRO)

  • Retained at outperform at Macquarie; Price Target: $184.40


Scans

Top Gainers

Code Company Last % Chg
KLI Killi Resources Ltd $0.12 +51.90%
DAL Dalaroo Metals Ltd $0.03 +50.00%
I88 Infini Resources Ltd $0.73 +48.98%
AL3 AML3D Ltd $0.19 +31.03%
DDB Dynamic Group Hol... $0.29 +23.40%
View all top gainers

Top Fallers

Code Company Last % Chg
ASQ Australian Silica... $0.02 -31.03%
PNM Pacific Nickel Mi... $0.021 -25.00%
MMM Marley Spoon Se $0.019 -24.00%
RC1 Redcastle Resourc... $0.017 -19.05%
OLY Olympio Metals Ltd $0.04 -18.37%
View all top fallers

52 Week Highs

Code Company Last % Chg
KLI Killi Resources Ltd $0.12 +51.90%
I88 Infini Resources Ltd $0.73 +48.98%
CYL Catalyst Metals Ltd $1.41 +23.14%
FBR FBR Ltd $0.054 +14.89%
AMS Atomos Ltd $0.031 +10.71%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
PNM Pacific Nickel Mi... $0.021 -25.00%
CDR Codrus Minerals Ltd $0.035 -16.67%
M24 Mamba Exploration... $0.013 -13.33%
AX8 Accelerate Resour... $0.022 -12.00%
DTZ DOTZ Nano Ltd $0.11 -12.00%
View all 52 week lows

Near Highs

Code Company Last % Chg
ALL Aristocrat Leisur... $51.70 +0.35%
BOQ Bank of Queenslan... $6.11 -0.49%
GROW Schroder Real Ret... $3.63 0.00%
LPGD Loftus Peak Globa... $4.78 -0.83%
AMH Amcil Ltd $1.125 -0.88%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
CNEW Vaneck China New ... $5.54 +0.18%
CCX City Chic Collect... $0.12 -4.00%
WC8 Wildcat Resources... $0.28 0.00%
SEK Seek Ltd $19.94 +0.50%
NHF Nib Holdings Ltd $6.90 +0.29%
View all RSI oversold

Written By

Carl Capolingua

Content Editor

Carl has over 30-years investing experience, helping investors navigate several bull and bear markets over this time. He is a well respected markets commentator who specialises in how the global macro impacts Australian and US equities. Carl has a passion for technical analysis and has taught his unique brand of price-action trend following to thousands of Aussie investors.

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