Evening Wrap: ASX 200 edges higher on big broker price target hikes in property sector, uranium and copper slow burn continues

The S&P/ASX 200 closed 7.0 points higher, up 0.09%.

Overall a quiet session, just 7 points to the better for the benchmark S&P/ASX 200, as we wait patiently for fund managers to sort out their rotations in a post-China stimulus-post interest rate cutting cycle commencement world.

That's a lot to consider.

There's also still plenty to consider in this Evening's Wrap, so 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 of the key upcoming economic data.

Also, I have detailed technical analysis on the Nasdaq Composite and LME Copper in today's ChartWatch.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 7.0 points higher at 8,205.2, pretty much smack bang in the middle of its narrow 0.45% trading range. Despite the sliver of a gain in the benchmark, it’s worth noting that In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by a not-insignificant 113 to 165.

Real Estate Investment Trusts (XPJ) (+1.7%) was the best performing sector today, likely in response to a research note from major broker Morgan Stanley titled "Reflecting Inflexion" in which it increased its price target on 21 stocks within the sector. The broker cited falling interest rates / market yields for its moves (see – I keep telling you the XPJ is the most interest rate sensitive sector!)

We have all the details for you of Morgan Stanley's price changes in today's Broker Moves section, but for now note the the biggest increases were reserved for Centuria Capital Group (ASX: CNI) (+25.6% retained OVERWEIGHT rating), Stockland (ASX: SGP) (+19.8% retained OVERWEIGHT rating), Charter Hall Long Wale Reit (ASX: CLW) (+18.2% retained EQUAL-WEIGHT rating), and Lendlease Group (ASX: LLC) (+15.7% retained EQUAL-WEIGHT rating).

The best performing stocks from the XPJ today

There was daylight aplenty between the XPJ and the next best performing sectors of Communication Services (XTJ) (+0.35%), Industrials (XNJ) (+0.30%), Health Care (XHJ) (+0.21%), and Information Technology (XIJ) (+0.15%).

The rest of the major sectors logged losses today, led by the Gold (XGD) (-0.99%) sub-index, with Utilities (XUJ) (-0.41%), and Consumer Discretionary (XDJ) (-0.35%) also modestly weaker.

The recent ASX heroes of Energy (XEJ) (-0.07%) and Resources (XJR) (-0.06%) took a breather today, but there were some highlights across both including in uranium stocks Deep Yellow (ASX: DYL) (+3.4%) and Bannerman Energy (ASX: BMN) (+3.3%), and copper stocks Capstone Copper Corp. (ASX: CSC) (+3.74%) and Sandfire Resources (ASX: SFR) (+1.5%).

Both underlying commodities rose last night. Uranium only edged higher, but copper swung nicely back to the upside – and this is why I have detailed technical analysis on it for you in tonight's ChartWatch below.

ChartWatch

NASDAQ Composite Index

The jury is out in the short term...

The last time we covered Comp was in ChartWatch in the Evening Wrap on 12 September.

In that update, I noted “one of the most emphatic demand-side candles you are likely to see – it is an absolute cracker” had just occurred. Indeed, the rally from there (well, from the dynamic demand of the long term uptrend really), was just shy of 1,000 points.

We’re back in supply-side flex mode. You could also call this test of demand-side resolve mode. It what markets are always doing, testing, probing, pushing, trying to determine which side is in control.

The jury is out in the short term, I suggest it’s quite neutral there now. Longer term, there is still no doubt about demand-side control, and this will remain the case as long as the Comp continues to close above the long term uptrend ribbon.

Short term supply-side control could be confirmed by a close below the short term uptrend ribbon, particularly on an emphatic supply-side candle (i.e., one with a black body and or long upward pointing shadow). In this scenario, 17296-17480 is the next key zone of demand.

On the other hand, demand-side control could be confirmed by an emphatic demand-side candle here in the short term uptrend ribbon. It would have the customary white body and or long downward pointing shadow. In this scenario, 18328 is the next key point of supply, and after a close above that, only the all-time high of 18671 stands in the way.

Which scenario is more likely? I’m going to stick with the long term trend and say the second one (i.e., the bullish one!).

Copper - LME Official Cash

LME copper technicals confirm resumption of short and long term uptrend thesis

The last time we covered copper (COMEX high grade) was in ChartWatch in the Evening Wrap on 30 September.

In that update, we noted that high grade copper had tipped my overhead target at 4.762-4.768 perfectly before the supply-side took control and forced the price back down with a long upward pointing shadow.

I will leave the investigation to that chart to your homework, but today I thought I’d show you a slightly different picture of the developing copper resurgence with this chart of LME cash copper.

Obviously, they’re largely the same, but a big drawback in LME pricing is the lack of candles – only a PM fix price is provided. It’s why I tend to cover high grade copper more often here – because charting without candles is like playing pin the tail on the donkey without the customary peak through a crack in the blindfold!

I like what’s happening here. You know how I feel about V-shaped rallies – they’re generally the ones that have legs. This last leg from 8830 is extending nicely with very little downside volatility – a sure sign of demand-side control.

This means the price action is rising peaks and rising troughs, with good separation between troughs and peaks, and both the short and long term trends have turned up.

I see demand at 9741, but then dynamic demand at the short term uptrend ribbon. I see supply at 9930, and upon a close above this up to 10331. I suggest there’s enough momentum here to clear 9930, and therefore take a look at 10331.

What could upset the apple cart here? The usual manifestations of excess supply: falling peaks and falling troughs, closing below the short term uptrend ribbon, sharp reversals (particularly from defined points of supply.

Economy

Today

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

Later this week

Friday

• All Day CHN National Day Public Holiday

• 22:30 USA Non-Farm Payrolls September

  • Employment change 144,000 forecast vs 142,000 previous in August

  • Unemployment rate 4.2% forecast vs 4.2% in August

  • Average Hourly Earnings +0.3% m/m forecast vs +0.4% m/m in August

Latest News

Interesting Movers

Trading higher

• +8.4% Mesoblast (MSB) - No news since 30 Sep Mesoblast Option to Issue up to US$50m Convertible Notes, rise is consistent with prevailing short and long term uptrends 🔎📈

• +8.1% Sigma Healthcare (SIG) - No news since 1 Oct ACCC Public Consultation regarding Proposed Undertakings, rise is consistent with prevailing short and long term uptrends (it's been a ChartWatch Scans Uptrends list stalwart!) 🔎📈

• +6.0% Avita Medical (AVH) - No news, some interesting price action developing here, rise is consistent with prevailing short term uptrend, long term trend remains down - but probing long term downtrend ribbon now 🔎📈

• +3.7% Capstone Copper Corp. (CSC) - No news since 2 Oct Achievement of Commercial Production at MVDP and Leadership and Mantoverde Optimized Feasibility Study, copper price up on LME and COMEX overnight, rise is consistent with prevailing short term uptrend (also recently featuring in ChartWatch Scans Uptrends list) 🔎📈

• +3.4% Objective Corporation (OCL) - No news, rise is consistent with prevailing short and long term uptrends, bounced off long term uptrend ribbon 🔎📈

• +3.4% Deep Yellow (DYL) - No news since 30 Sep Appointment of Head of Project Delivery, generally a strong day for ASX uranium stocks, rise is consistent with prevailing short and long term uptrends 🔎📈

• +3.3% Bannerman Energy (BMN) - No news, ditto strong ASX uranium stocks

• +3.0% Dexus (DXS) - Morgan Stanley increases price targets on broker's entire ASX Property coverage, including on DXS to $2.45 from $2.15

• +3.0% Imdex (IMD) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +2.9% Light & Wonder (LNW) - 3 x Directors Interests notices showing acquisitions (albeit at $0 cost), more likely just a bounce back after the massive fall following 24 Sep Update on Dragon Train Litigation

• +2.8% Mirvac Group (MGR) - Morgan Stanley increases price targets on broker's entire ASX Property coverage, including on DXS to $8.25 from $7.40

• +2.6% Silex Systems (SLX) - No news, ditto strong ASX uranium stocks

• +2.5% Fletcher Building (FBU) - Change in substantial holding (increase)

• +2.5% HMC Capital (HMC) - Morgan Stanley increases price targets on broker's entire ASX Property coverage, including on DXS to $8.80 from $7.88

• +2.4% Nexgen Energy (NXG) - No news, ditto strong ASX uranium stocks

Trading lower

• -9.8% Brainchip (BRN) - No news, gave back most of yesterday's gain (also on no news…) fall is consistent with prevailing long term downtrend 🔎📉

• -9.0% Syrah Resources (SYR) - No news, gave back some of yesterday's gain (also on no news…) fall is consistent with prevailing long term downtrend 🔎📉

• -7.9% Appen (APX) - Ceasing to be a substantial holder

• -7.3% 29METALS (29M) - No news, a real stinker given technicals have picked up recently and copper price was up on LME and COMEX overnight!

• -6.7% Strike Energy (STX) - No news, gave back some of yesterday's gain (also on no news…) fall is consistent with prevailing long term downtrend 🔎📉

• -6.5% Novonix (NVX) - NOVONIX Announces October Investor Event and Business Update

• -5.9% Sayona Mining (SYA) - No news, fall is consistent with prevailing long term downtrend, repelled by the long term downtrend ribbon 🔎📉

• -5.6% New Hope Corporation (NHC) - Ex-div $0.22 fully franked

• -5.6% EML Payments (EML) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -5.5% The Star Entertainment Group (SGR) - No news since 30 Sep FY2024 Financial Report, fall is consistent with prevailing short and long term downtrends 🔎📉

• -5.0% ARB Corporation (ARB) - Underwriting of Dividend, Ex-div $0.35 fully franked

• -5.0% Botanix Pharmaceuticals (BOT) - Botanix Staff Update and AGM Notice of Meeting

• -4.8% Pilbara Minerals (PLS) - No company news, but AFR reported today Bank of America is shopping a large block of the company's stock at a discount to yesterday's close, fall is consistent with prevailing long term downtrend (repelled by the long term downtrend ribbon) 🔎📉

• -4.3% Liontown Resources (LTR) - FY24 Environmental, Social and Governance Report, generally weaker lithium / battery materials sector today, fall is consistent with prevailing short and long term downtrends 🔎📉

• -4.0% Core Lithium (CXO) - No news since 27 Sep Core Lithium 2024 Annual Report to Shareholders, fall is consistent with prevailing long term downtrend 🔎📉

• -3.7% Stanmore Resources (SMR) - No news, fall is consistent with prevailing long term downtrend, repelled by the long term downtrend ribbon 🔎📉

• -3.6% Chalice Mining (CHN) - No news, gave back most of yesterday's gain (also on no news…) fall is consistent with prevailing long term downtrend 🔎📉

• -3.6% Select Harvests (SHV) - No news since 23 Sep Successful Completion of Institutional Offer, fall is consistent with prevailing short and long term downtrends 🔎📉

• -3.4% DUG Technology (DUG) - No news, fall is consistent with prevailing short downtrend, long term is transitioning from up to down 🔎📉

• -2.2% Guzman y Gomez (GYG) - Goldman Sachs initiates stock with a SELL rating and a price target of $33.20

Broker Notes

• Life360 (360)

  • Retained at buy at Goldman Sachs; Price Target: $21.85

• Audinate Group (AD8)

  • Initiated at hold at Moelis Australia; Price Target: $10.50

• AMP (AMP)

  • Retained at neutral at Macquarie; Price Target: $1.30 from $1.26

• Arena Reit (ARF)

  • Retained at equal-weight at Morgan Stanley; Price Target: $4.65 from $4.10

• Bank of Queensland (BOQ)

  • Retained at underweight at Morgan Stanley; Price Target: $5.70

• BWP Trust (BWP)

  • Retained at equal-weight at Morgan Stanley; Price Target: $4.25 from $4.00

• Car Group (CAR)

  • Upgraded to overweight from neutral at JP Morgan; Price Target: $40.00 from $33.50

• Codan (CDA)

  • Initiated at hold at Bell Potter; Price Target: $16.90

• Centuria Industrial Reit (CIP)

  • Retained at equal-weight at Morgan Stanley; Price Target: $3.85 from $3.81

• Collins Foods (CKF)

  • Initiated at buy at Goldman Sachs; Price Target: $10.00

• Charter Hall Long Wale Reit (CLW)

  • Retained at equal-weight at Morgan Stanley; Price Target: $4.55 from $3.85

• Centuria Capital Group (CNI)

  • Retained at overweight at Morgan Stanley; Price Target: $2.45 from $1.95

• Centuria Office Reit (COF)

  • Retained at underweight at Morgan Stanley; Price Target: $1.35 from $1.30

• Charter Hall Retail Reit (CQR)

  • Retained at equal-weight at Morgan Stanley; Price Target: $4.15 from $3.95

• Dexus (DXS)

  • Retained at underweight at Morgan Stanley; Price Target: $8.25 from $7.40

• Endeavour Group (EDV)

  • Downgraded to neutral from buy at Bank of America; Price Target: $5.30 from $5.80

• Fineos Corporation (FCL)

  • Initiated at buy at Moelis Australia; Price Target: $1.80

• Goodman Group (GMG)

  • Retained at overweight at Morgan Stanley; Price Target: $42.40 from $38.05

• GPT Group (GPT)

  • Retained at overweight at Morgan Stanley; Price Target: $6.15 from $5.60

• Guzman y Gomez (GYG)

  • Initiated at sell at Goldman Sachs; Price Target: $33.20

• Healthco Healthcare and Wellness Reit (HCW)

  • Retained at underweight at Morgan Stanley; Price Target: $1.20 from $1.30

• Homeco Daily Needs Reit (HDN)

  • Retained at equal-weight at Morgan Stanley; Price Target: $1.40 from $1.39

• HMC Capital (HMC)

  • Retained at equal-weight at Morgan Stanley; Price Target: $8.80 from $7.88

• Lendlease Group (LLC)

  • Retained at equal-weight at Morgan Stanley; Price Target: $7.35 from $6.35

• Arcadium Lithium (LTM)

  • Retained at neutral at Goldman Sachs; Price Target: $5.35 from $5.60

  • Initiated at buy at Morgans; Price Target: $5.40

• Mirvac Group (MGR)

  • Retained at equal-weight at Morgan Stanley; Price Target: $2.45 from $2.15

• National Storage Reit (NSR)

  • Retained at underweight at Morgan Stanley; Price Target: $2.55 from $2.45

• Objective Corporation (OCL)

  • Initiated at buy at Moelis Australia; Price Target: $17.60

• Pantoro (PNR)

  • Initiated at buy at Canaccord Genuity; Price Target: $0.16

• Region Group (RGN)

  • Retained at underweight at Morgan Stanley; Price Target: $2.55 from $2.44

• Resmed Inc (RMD)

  • Retained at accumulate at Ord Minnett; Price Target: $39.00

• Scentre Group (SCG)

  • Retained at overweight at Morgan Stanley; Price Target: $4.35 from $3.79

• Stockland (SGP)

  • Retained at overweight at Morgan Stanley; Price Target: $6.35 from $5.30

• Tamboran Resources Corporation (TBN)

  • Retained at outperform at Macquarie; Price Target: $0.30

• Technology One (TNE)

  • Retained at hold at Bell Potter; Price Target: $24.00 from $22.25

• Vicinity Centres (VCX)

  • Retained at underweight at Morgan Stanley; Price Target: $2.35 from $2.25

• Webjet (WEB)

  • Retained at equal-weight at Morgan Stanley; Price Target: $7.00 from $8.15

• Webjet (WJL)

  • Initiated at hold at CLSA; Price Target: $0.90

• Waypoint Reit (WPR)

  • Retained at underweight at Morgan Stanley; Price Target: $2.75 from $2.60

• Wisetech Global (WTC)

  • Retained at neutral at Citi; Price Target: $138.00 from $90.00

Scans