Market Wraps

Evening Wrap: ASX 200 dips on Telstra and James Hardie results, metals stocks keep chugging along

Tue 21 May 24, 5:35pm (AEST)

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Share article

The S&P/ASX 200 closed 12 points lower, down 0.15%.

On the surface a quiet day – but do a little digging and it was far from thus!

Results from Telstra, Technology One, ALS, and James Hardie saw big moves in each of those stocks, while base metals stocks kept chugging along driven by ever-spiralling prices on the London Metals Exchange.

Beaten down lithium and critical minerals stocks bounced back.

Let's dive in!


Today in Review

Tue 21 May 24, 4:43pm (AEST)

Name Value % Chg
Major Indices
ASX 200 7,851.7 -0.15%
All Ords 8,120.2 -0.15%
Small Ords 3,080.4 +0.32%
All Tech 3,077.9 +0.70%
Emerging Companies 2,261.2 +0.15%
Currency
AUD/USD 0.6661 -0.11%
US Futures
S&P 500 5,333.75 +0.04%
Dow Jones 39,956.0 +0.03%
Nasdaq 18,751.0 -0.06%
Name Value % Chg
Sector
Information Technology 2,278.9 +0.72%
Industrials 6,866.1 +0.66%
Consumer Discretionary 3,547.2 +0.31%
Consumer Staples 11,824.6 +0.23%
Utilities 9,080.8 +0.21%
Energy 10,365.5 +0.09%
Financials 7,416.6 +0.04%
Real Estate 3,671.2 -0.21%
Health Care 42,147.1 -0.52%
Materials 18,804.4 -0.72%
Communication Services 1,495.0 -1.05%

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Markets

S&P ASX 200 (XJO) Intraday Chart 21 May 2024
ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 12 points lower at 7,851.7, 0.24% from its session high and just 0.13% from its low. Despite the decline, in the broader-based S&P/ASX 300 (XKO), advancers beat decliners by 145 to 128.

The Information Technology (XIJ) (+0.72%) was the best performing sector today, likely in response to a swathe of strong performances among its major constituents. The sector leader was undoubtedly Technology One (ASX: TNE), which popped 4.5% on the back of its Half Year FY24 Results.

Company

Last Price

Change $

Change %

1mo %

1yr %

Findi (FND)

$3.77

+$0.73

+24.0%

+42.8%

+539.0%

Technology One (TNE)

$16.75

+$0.73

+4.6%

+6.3%

+11.1%

Life360 (360)

$16.55

+$0.56

+3.5%

+29.0%

+137.4%

Nuix (NXL)

$3.08

+$0.1

+3.4%

+57.9%

+194.7%

Audinate Group (AD8)

$16.72

+$0.48

+3.0%

-8.6%

+86.8%

Siteminder (SDR)

$5.42

+$0.11

+2.1%

-0.6%

+80.7%

Gentrack Group (GTK)

$8.70

+$0.1

+1.2%

+16.8%

+166.9%

Today's best ASX tech stocks

Also doing well today was the Industrials (XNJ) (+0.66%) sector. Again, it was major constituent-specific news to blame for the strength here, this time ALS (ASX: ALQ) which rose +5% after releasing its Full Year FY24 Results.

No doubt, Qantas Airways (ASX: QAN) tidy 3.3% gain also had a great deal to do with the XNJ's performance today. No news on QAN, but I do note it's chart is picking up nicely with a well-established short term uptrend and a long term trend that appears to be transitioning from down to up πŸ”ŽπŸ“ˆ.

Qantas Airways (ASX-QAN) chart 21 May 2024
QAN's long term trend that appears to be transitioning from down to up

Company

Last Price

Change $

Change %

1mo %

1yr %

Redox (RDX)

$3.23

+$0.23

+7.7%

+11.8%

0%

ALS (ALQ)

$14.48

+$0.69

+5.0%

+11.0%

+17.3%

Smartgroup Corporation (SIQ)

$8.43

+$0.3

+3.7%

-13.5%

+20.0%

IPH (IPH)

$6.37

+$0.21

+3.4%

+4.4%

-20.2%

Qantas Airways (QAN)

$6.27

+$0.2

+3.3%

+11.6%

-2.8%

Chrysos Corporation (C79)

$5.85

+$0.17

+3.0%

-13.8%

+35.1%

Southern Cross Electrical Engineering (SXE)

$1.565

+$0.045

+3.0%

+32.6%

+146.5%

Cleanaway Waste Management (CWY)

$2.78

+$0.07

+2.6%

+9.4%

+6.9%

Downer EDI (DOW)

$4.91

+$0.11

+2.3%

+8.6%

+33.8%

Qube Holdings (QUB)

$3.63

+$0.08

+2.3%

+11.0%

+16.7%

SRG Global (SRG)

$0.900

+$0.015

+1.7%

+11.8%

+23.3%

Today's best industrial stocks

Doing it tough today was the Communication Services (XTJ) (-1.1%) sector. The sector is heavily influenced by Telstra Group (ASX: TLS) which is its second largest constituent by market capitalisation.

TLS dipped 2.2% after it announced would likely cut 2800 jobs to facilitate the "reset" of its Enterprise business. This would result in restructuring costs of $200-$250 million. TLS reaffirmed its FY24 profit guidance and further provided FY25 guidance of $8.4-$8.7 billion for EBITDA.

While the market didn't appear to cheer the update, major broker UBS liked it, noting the "Mobiles business continues to perform strongly", and that "FY25 guidance suggests company is expecting Mobiles to continue to be a driver of growth". UBS retained their BUY rating on the stock along with their $4.40 valuation.

Also underperforming, especially given yesterday’s strong performance, is the Materials (XMJ) (-0.72%) sector. It looks a great deal worse than it actually was here, though, with most of the damage coming from a massive 14.8% plunge in James Hardie Industries (ASX: JHX) after it reported disappointing Q4 FY24 Results.

James Hardie Industries (ASX-JHX) chart 21 May 2024
James Hardie had a tough day today

Outside of JHX's demise (that chart has long term trend change written all over it πŸ”ŽπŸ“‰), there was plenty of strength in resource stocks focused on base metals and even several lithium and critical minerals stocks.

Company

Last Price

Change $

Change %

1mo %

1yr %

Ioneer (INR)

$0.245

+$0.015

+6.5%

+19.5%

-31.0%

Catalyst Metals (CYL)

$1.050

+$0.06

+6.1%

+22.1%

+37.3%

Vulcan Energy Resources (VUL)

$5.10

+$0.28

+5.8%

+67.8%

+19.2%

Syrah Resources (SYR)

$0.515

+$0.025

+5.1%

+7.3%

-42.9%

Ora Banda Mining (OBM)

$0.345

+$0.015

+4.5%

0%

+109.1%

Southern Cross Gold (SXG)

$2.99

+$0.11

+3.8%

+43.8%

+443.9%

Base Resources (BSE)

$0.275

+$0.01

+3.8%

+161.9%

+61.8%

29METALS (29M)

$0.560

+$0.02

+3.7%

+28.7%

-43.4%

Spartan Resources (SPR)

$0.735

+$0.025

+3.5%

+12.9%

+491.8%

Imdex (IMD)

$2.27

+$0.07

+3.2%

+7.1%

+11.8%

Red 5 (RED)

$0.490

+$0.015

+3.2%

+14.0%

+216.1%

Lotus Resources (LOT)

$0.485

+$0.01

+2.1%

+21.3%

+142.5%

Resolute Mining (RSG)

$0.505

+$0.01

+2.0%

+13.5%

+9.8%

Today's best mining stocks

The Gold (XGD) sub-index was also pretty average today, it fell 0.58%.


ChartWatch

NASDAQ Composite Index

NASDAQ Composite Index 20 May 2024
I put to you the above chart is in a state of excess demand

The last time we checked up on the S&P/ASX200 and the NASDAQ Composite Index, or “the Comp” as the latter is more commonly known, was in the ChartWatch of the Evening Wrap on 15 May.

Starting with the Comp, it remains a picture of excess demand. This means there’s absolutely nothing in the technicals of this chart which gives me any cause for concern. Zero. Nada. Bupkis.

But, given that I am unfortunately able to tell the future, I can’t say that 'a something' won’t appear as soon as tonight’s candle.

This is the essence of my philosophy on markets and on investing. I can’t predict the future, so why concern myself with it? 🀷‍♂️

What will be will be, and whatever is: The candles will tell me everything I need to know.

I put to you the above chart is in a state of excess demand. Therefore there's just 3 possibilities from here:

  1. It continues in some version of its present state (i.e., prices will keep going up at some rate)

  2. Supply increases and or demand decreases sufficiently to cause a transition to a state of equilibrium (i.e., prices will go sideways)

  3. Supply increases and or demand decreases to cause a transition to state of excess supply (i.e., prices will go down)

Supply manifests itself in the following forms:

  • Black candles and or upward pointing shadows

  • Falling peaks (supply reinforcement) and falling troughs (demand removal)

That’s it.

Until I see supply, there’s nothing to worry about (at least with respect to the markets, but I did read this today, and it’s quite concerning!).

S&P/ASX 200 (XJO)

S&P ASX 200 XJO 21 May 2024
Excess demand, but not as good as the Comp's

Assuming that 50% of the audience have now shifted uncomfortably in their chairs, it's time to bring it back home and take a look at the local benchmark.

The first thing you'll notice is that we haven't yet printed our record high. The good news is, (not being able to tell the future and all), I can’t see any reason in the technicals why we can’t do so – as early as this week.

Short and long term trends are very much intact, and even appear to be gaining strength. The price action is rising peaks and rising troughs, and the candles are predominantly demand-side in nature (i.e., white bodies and or downward pointing shadows).

Obviously, we need to knock out any latent supply lurking around the 7911 all time high.

There are likely to be those on the demand-side who are waiting for confirmation this level is dealt with before moving in, and equally on the supply-side who wish to know 7911 isn’t the zenith, and therefore it’s worth holding on for more.

I prefer a close above, not a tickle. That is, simply trading above 7911 on an intraday basis is insufficient confirmation it's been appropriately dealt with.

Looking at points of demand, I note 7815 is a minor point, with 7714 likely to be the key area to watch. I suggest that as long as the XJO continues to close above 7714 the short term uptrend remains intact.


Economy

Today

  • AUS Westpac Consumer Sentiment

    • -0.3% to 82.2% in May vs -2.4% April

    • Vs 100% = consumers neither optimistic or pessimistic

    • Households are concerned about persistent inflation

    • Survey was pre-budget, so June likely to be different

  • AUS Monetary Policy Meeting Minutes

    • "Members agreed that it was important to convey that recent data and other information had signalled that the risks around inflation had risen somewhat"

    • "A higher cash rate might also be required, even with ongoing weakness in aggregate demand, if other factors slowed the pace of disinflation."

Later this week

Thursday

  • 04:00 USA FOMC Meeting Minutes

  • 09:00 AUS Flash Manufacturing PMI (49.6 previous) & Flash Services PMI (53.6 previous)

  • 17:15 (from) EU Various countries Flash Manufacturing and Services PMIs

  • 23:45 USA Flash Manufacturing PMI (50.1 forecast vs 50.0 previous) & Flash Services PMI (51.5 forecast vs 51.3 previous)

Friday

  • 22:30 USA Core Durable Goods Orders April (+0.1% forecast vs +0.0% March)


Latest News


Interesting Movers

Trading higher

  • +17.7% OFX Group (OFX) - FY24 Results Presentation, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up πŸ”ŽπŸ“ˆ

  • +12.3% Omni Bridgeway (OBL) - No news, bounced after massive sell off

  • +7.7% Redox (RDX) - No news, rise is consistent with prevailing short term and long term uptrends πŸ”ŽπŸ“ˆ

  • +6.5% Ioneer (INR) - No news, generally stronger small-cap lithium/critical minerals stocks today, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up πŸ”ŽπŸ“ˆ

  • +5.8% Vulcan Energy Resources (VUL) - Corporate Presentation - May 2024, generally stronger small-cap lithium/critical minerals stocks today, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up πŸ”ŽπŸ“ˆ

  • +5.1% Syrah Resources (SYR) - No news, generally stronger small-cap lithium/critical minerals stocks today

  • +5.0% ALS (ALQ) - ALS Full Year Results FY24, rise is consistent with prevailing short term and long term uptrends πŸ”ŽπŸ“ˆ

  • +4.7% Mesoblast (MSB) - No news, generally stronger small-cap lithium/critical minerals stocks today

  • +4.6% Technology One (TNE) - Half Year Accounts, rise is consistent with prevailing short term and long term uptrends πŸ”ŽπŸ“ˆ

Trading lower


Broker Notes

  • ALS (ALQ) retained at neutral at UBS; Price Target: $13.30

  • AUB Group (AUB) retained at outperform at Macquarie; Price Target: $33.34

  • Bowen Coking Coal (BCB) retained at buy at Shaw and Partners; Price Target: $0.24 from $0.23

  • Car Group (CAR) retained at neutral at Citi; Price Target: $34.70

  • CSL (CSL) retained at overweight at Morgan Stanley; Price Target: $310.00

  • Dicker Data (DDR)

    • Upgraded to buy from overweight at Jarden; Price Target: $11.38 from $12.61

    • Retained at neutral at UBS; Price Target: $9.65 from $11.80

  • Domain Holdings Australia (DHG) retained at buy at Citi; Price Target: $3.85

  • Elders (ELD)

    • Retained at buy at Bell Potter; Price Target: $9.30 from $9.10

    • Retained at buy at Citi; Price Target: $8.50

    • Downgraded to outperform from buy at CLSA; Price Target: $8.75 from $9.00

    • Downgraded to neutral from outperform at Macquarie; Price Target: $8.35 from $8.25

    • Retained at buy at Shaw and Partners; Price Target: $9.10 from $9.00

  • Galan Lithium (GLN) retained at neutral at Macquarie; Price Target: $0.25 from $0.35

  • GTI Energy (GTX) retained at buy at Shaw and Partners; Price Target: $9.10 from $6.90

  • Harvey Norman Holdings (HVN) upgraded to outperform from neutral at Macquarie; Price Target: $5.30 from $5.10

  • JB HI-FI (JBH) upgraded to outperform from neutral at Macquarie; Price Target: $63.00 from $61.00

  • James Hardie Industries (JHX) retained at buy at UBS; Price Target: $66.50

  • Lendlease Group (LLC) retained at neutral at Citi; Price Target: $6.90

  • Mirvac Group (MGR) retained at equal-weight at Morgan Stanley; Price Target: $2.35 from $2.41

  • Michael Hill International (MHJ) retained at outperform at Macquarie; Price Target: $0.85 from $1.05

  • McMillan Shakespeare (MMS) retained at buy at Bell Potter; Price Target: $22.20 from $22.52

  • New Hope Corporation (NHC)

    • Retained at neutral at Citi; Price Target: $4.85

    • Retained at underweight at Macquarie; Price Target: $4.10 from $4.00

  • Nuix (NXL)

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

    • Retained at buy at Shaw and Partners; Price Target: $3.00 from $2.40

  • Pointsbet Holdings (PBH) retained at buy at Bell Potter; Price Target: $0.63

  • PYC Therapeutics (PYC) initiated at buy at Bell Potter; Price Target: $0.17

  • REA Group (REA) retained at neutral at Citi; Price Target: $192.60

  • Scentre Group (SCG) upgraded to outperform from neutral at Macquarie; Price Target: $3.37 from $3.03

  • Steadfast Group (SDF) retained at outperform at Macquarie; Price Target: $6.40

  • The Star Entertainment Group (SGR) retained at neutral at Macquarie; Price Target: $0.50

  • Telstra Group (TLS) retained at buy at UBS; Price Target: $4.40

  • Telix Pharmaceuticals (TLX) retained at buy at UBS; Price Target: $19.30

  • Technology One (TNE) retained at neutral at UBS; Price Target: $16.40

  • Wesfarmers (WES) retained at neutral at Macquarie; Price Target: $65.40 from $64.60


Scans

Top Gainers

Code Company Last % Chg
SNX Sierra Nevada Gol... $0.076 +85.37%
GIB Gibb River Diamon... $0.037 +48.00%
CDD Cardno Ltd $0.42 +44.83%
CUS Copper Search Ltd $0.155 +29.17%
HAR Haranga Resources... $0.12 +27.66%
View all top gainers

Top Fallers

Code Company Last % Chg
AMS Atomos Ltd $0.021 -67.69%
R8R REGENER8 Resource... $0.095 -24.00%
VBS Vectus Biosystems... $0.125 -21.88%
ANX ANAX Metals Ltd $0.044 -16.98%
SS1 Sun Silver Ltd $0.595 -16.78%
View all top fallers

52 Week Highs

Code Company Last % Chg
LGM Legacy Minerals H... $0.285 +26.67%
FND Findi Ltd $3.77 +24.01%
AGC Australian Gold a... $0.39 +18.18%
G11 G11 Resources Ltd $0.046 +12.20%
KPG Kelly Partners Gr... $7.48 +9.68%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
AMS Atomos Ltd $0.021 -67.69%
R8R REGENER8 Resource... $0.095 -24.00%
DAF Discovery Alaska Ltd $0.014 -12.50%
ENL Enlitic Inc $0.35 -12.50%
PTL Prestal Holdings Ltd $0.175 -10.26%
View all 52 week lows

Near Highs

Code Company Last % Chg
AASF Airlie Australian... $3.85 -0.26%
LOT Lotus Resources Ltd $0.485 +2.11%
EMMG Betashares Martin... $5.97 -0.67%
STW SPDR S&P/ASX 200 ... $71.01 -0.17%
EGH Eureka Group Hold... $0.535 +0.94%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
DDR Dicker Data Ltd $9.05 -0.66%
KMD KMD Brands Ltd $0.43 +8.18%
OBL Omni Bridgeway Ltd $0.775 +12.32%
SPK Spark New Zealand... $3.82 -0.78%
NSC Naos Small Cap Op... $0.53 0.00%
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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