Evening Wrap: ASX 200 edges higher on surging gold stocks, but uranium meltdown continues

Another day, another gain. Dare we again dream about reaching a new high? 🤔

I don't want to jinx it, so let me note another key global security that did make a new high over the weekend - Gold 🥇.

The good news is, the ASX is blessed with plenty of gold stocks, big, small, producing, and just kicking over rocks in the desert somewhere. It didn't matter which - all enjoyed the rally today.

Heading the other way, unfortunately, the usual suspects of iron ore, lithium and (particularly today) - uranium. If this is your portfolio, you might not want to look this evening.

But that would mean you'd miss out on everything that's going on in results land, and that means also in broker updates land!

We've got all you need to know here and there and plenty more, so...

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 9.3 points higher at 7,980.4, 0.37% from its session low and just 0.13% from its high. Despite the gains at the headline, in the broader-based S&P/ASX 300 (XKO), advancers actually lagged decliners by 122 to 142.

The Gold (XGD) (+1.7%) sub-index was the best performing sector today, likely in response to a strong performance in the gold price on Friday – closing it at a new all-time high. We’ve been tracking this potentiality closely in ChartWatch, so it’s great to see it finally play out – along with strong gains in so many ASX gold stocks that have featured heavily in my ChartWatch ASX Scans Uptrends lists.

The Gold price notched a new record high on Friday

ASX gold stocks today

Also doing well today was the Utilities (XUJ) (+1.7%) sector. It enjoyed a rebound in major constituent Origin Energy (ORG) (2.5%) which was smashed after its FY24 results on Thursday. The other major constituent, AGL Energy (AGL) (1.8%) continued its strong run.

Doing it tough today was the Consumer Staples (XSJ) (-0.83%) sector. It slumped under the weight of a terrible decline in The A2 Milk Co. (A2M) (-18.7%) that disappointed in the delivery of its FY24 results. Citi said the result was around 3% below consensus expectations (not so bad), but the all important FY25 guidance missed the mark considerably (mid-single-digit vs the +9% the market wanted).

If I tell you that ASX Energy (XEJ) (-0.55%) and Resources (XJR) (-0.53%) stocks struggled again, you would accuse me of being a broken record. Or simply stating facts. There are some pretty woeful trends in these sectors, across iron ore, lithium, and todays major decliner – uranium. There wasn’t a great deal I could see to drive the falls in that sector – but again, when trends are so firmly set to the downside – you don’t always need an excuse: momentum breeds momentum.

The worst of the ASX Energy and Resources sectors today.

ChartWatch

S&P/ASX 200 (XJO)

An interesting chart

The last time we covered the XJO was in ChartWatch in the Evening Wrap on 14 August.

In that update, we were noting some fatigue at critical potential points of supply in the form of the (then) short term downtrend ribbon and the static 7861 point of supply. I also noted that we were yet to eclipse the important 7889 “balance point” of the recent correction – i.e., the point above which we could confidently say the demand side is more likely to be again in control of the price action.

Well, good news on all fronts: Friday’s emphatic demand-side candle put pay to all three key supply levels, and today’s more modest demand-side candle has caused the short term trend ribbon to flip back to up.

It’s been an impressive (incredible and somewhat confusing given the severity of the falls) rally since the 7628 low. There’s really now only one thing left in the technicals for the demand-side to do to confirm beyond all doubt their ultimate supremacy – and that is to close above the 8149 high.

In-between, the stuff we have done leads me to switch back to a bullish index bias again. Clearly, candles and holding above key demand points/zones will be critical in maintaining this. Therefore, I want to see continued closes above the short term uptrend ribbon (currently printing 7865-7872), and obviously, above 7628 for the long term trend.

I also note that the price really shouldn’t close below the low of Friday’s demand-side candle – to do so would signal that demand has been satisfied / departed the system – but that would coincide with a close below the short term uptrend anyway.

Clearly, 8149 is supply, but we may see supply begin to manifest itself as black-bodied candles and or upward pointing shadows near the top of the 2 August major supply-side candle around 8050-8100. I suggest you want to be watching the price action very closely there. Demand side candles instead would signal supply has nothing left in the tank and (again incredibly!) that we are headed to new highs.

Economy

Today

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

Later this week

Tuesday

• 11:15 CHN 1-year Loan Prime Rate & 5-year Loan Prime Rate (no change at 3.35% and 3.85% forecast)

• 11:30 AUS Monetary Policy Meeting Minutes

Wednesday

• 10:30 AUS MI Leading Index July (+0% in June)

Thursday

• 04:00 USA FOMC August Meeting Minutes

• 09:00 AUS Flash Manufacturing PMI & Flash Services PMI August (47.5 and 50.4 respectively in July)

• 17:15 EUR Various countries and EU Flash Manufacturing and Services PMIs

• 23:45 USA Flash Manufacturing PMI & Flash Services PMI August (49.8 forecast and 54.0 forecast respectively and vs 49.6 and 55.0 respectively in July)

Friday

• 00:00 USA Existing home sales July (3.92 million forecast vs 3.89 million June)

• ALL DAY USA Jackson Hole Symposium

Saturday

• 00:00 USA Federal Reserve Chairman Jerome Powell speech

• 00:00 USA New home sales July (628,000 forecast vs 617,000 June)

• ALL DAY USA Jackson Hole Symposium

Latest News

Interesting Movers

Trading higher

• +25.5% Nuix (NXL) - Appendix 4E and Preliminary Final Report and FY24 Financial Results Investor Presentation, rise is consistent with prevailing short and long term uptrends 🔎📈

• +19.9% Audinate Group (AD8) - FY24 Financial Statements & Appendix 4E and FY24 Investor Presentation

• +10.5% WA1 Resources (WA1) - No news, bounced off long term uptrend/closed above long term uptrend ribbon 🔎📈

• +9.4% Firefly Metals (FFM) - No news, gold price rise likely helping, rise is consistent with prevailing long term uptrend, short term trend is transitioning back to up 🔎📈

• +8.7% Resolute Mining (RSG) - No news, generally higher ASX gold sector on gold price strength Friday, rise is consistent with prevailing short and long term uptrends 🔎📈

• +6.3% Adriatic Metals (ADT) - No news, ditto gold

• +5.8% Austin Engineering (ANG) - Change in substantial holding from WMI/WAM/WAX (increase), rise is consistent with prevailing short and long term uptrends 🔎📈

• +4.9% Cettire (CTT) - No news, continued positive response to 15 Aug FY24 Results and Investor Briefing Details

Trading lower

• -18.7% The A2 Milk Company (A2M) - FY24 Annual Report and FY24 Results presentation

• -11.1% Silver Mines (SVL) - No news, continued negative response to 16 Aug Bowdens Silver Project Appeal Proceedings Outcome

• -5.8% Paladin Energy (PDN) - No news, generally tough day for ASX uranium stocks, no major move in US counterparts or uranium price - but this fall and falls across sector are consistent with prevailing short and long term downtrends - hence they have been regularly featured in ChartWatch Scans Downtrends lists! 🔎📉

• -5.4% Silex Systems (SLX) - Ditto ASX uranium

• -5.4% Power (PWH) - PWR FY2024 Investor Presentation and several broker updates in response to 15 August NEWS (see Broker Notes section below)

• -4.9% Fenix Resources (FEX) - Change in substantial holding from MGX (increase)

• -4.8% Bannerman Energy (BMN) - Ditto ASX uranium

• -4.8% Ampol (ALD) - 2024 Half Year Report and 2024 Half Year Results Presentation, fall is consistent with prevailing short and long term downtrends (one of the most featured charts in ChartWatch Scans Downtrends lists!) 🔎📈

• -4.7% Domain Australia (DHG) - No news since 16 Aug Domain FY24 Investor presentation commentary, several broker updates in response (see Broker Notes section below)

• -4.6% Boss Energy (BOE) - Ditto ASX uranium

• -4.3% Nexgen Energy (NXG) - Ditto ASX uranium

• -4.3% Deep Yellow (DYL) - Ditto ASX uranium

• -4.0% Lotus Resources (LOT) - Ditto ASX uranium

• -3.9% Reece (REH) - Preliminary Final Report and FY24 Investor Presentation

• -3.7% Mineral Resources (MIN) - No news, generally tough day for ASX lithium stocks, fall is consistent with prevailing short and long term downtrends - hence it has been regularly featured in ChartWatch Scans Downtrends lists! 🔎📉

• -3.1% Bluescope Steel (BSL) - FY2024 Full Year Appendix 4E and Annual Report and FY2024 Full Year Results - Investor Presentation

Broker Notes

• 3P Learning (3PL)

  • Retained at equal-weight at Morgan Stanley; Price Target: $1.20

• The A2 Milk Company (A2M)

  • Retained at buy at Citi; Price Target: $7.85

• Audinate Group (AD8)

  • Retained at buy at UBS; Price Target: $10.90

• Ampol (ALD)

  • Retained at outperform at Macquarie; Price Target: $36.50

• Aristocrat Leisure (ALL)

  • Downgraded to overweight from buy at Jarden; Price Target: $56.00 from $47.20

• Amcor (AMC)

  • Retained at hold at Jefferies; Price Target: $15.70 from $14.30

  • Retained at overweight at JP Morgan; Price Target: $16.40 from $16.80

  • Retained at outperform at Macquarie; Price Target: $16.50 from $15.40

  • Retained at equal-weight at Morgan Stanley; Price Target: $15.00

  • Downgraded to hold from add at Morgans; Price Target: $15.95

  • Downgraded to lighten from hold at Ord Minnett; Price Target: $14.10 from $14.30

  • Retained at neutral at UBS; Price Target: $16.65 from $15.85

• ASX (ASX)

  • Retained at neutral at Citi; Price Target: $62.30 from $61.90

  • Retained at hold at CLSA; Price Target: $61.50 from $60.90

  • Retained at sell at Goldman Sachs; Price Target: $59.00 from $59.50

  • Retained at neutral at Jarden; Price Target: $59.75 from $61.25

  • Retained at neutral at Macquarie; Price Target: $61.00 from $60.00

  • Retained at equal-weight at Morgan Stanley; Price Target: $58.00 from $54.65

  • Retained at hold at Morgans; Price Target: $62.90 from $61.00

  • Retained at lighten at Ord Minnett; Price Target: $59.50

  • Retained at sell at UBS; Price Target: $57.00 from $55.00

• Brickworks (BKW)

  • Retained at neutral at Macquarie; Price Target: $27.30

• Bluescope Steel (BSL)

  • Retained at buy at Citi; Price Target: $23.70

  • Retained at buy at UBS; Price Target: $25.00

• Brambles (BXB)

  • Retained at buy at UBS; Price Target: $17.40

• Car Group (CAR)

  • Retained at buy at Goldman Sachs; Price Target: $40.90

• Centuria Office Reit (COF)

  • Retained at hold at Bell Potter; Price Target: $1.25 from $1.30

• Cochlear (COH)

  • Upgraded to hold from lighten at Ord Minnett; Price Target: $308.00 from $298.50

• Charter Hall Retail Reit (CQR)

  • Retained at neutral at Macquarie; Price Target: $3.42 from $3.40

  • Retained at equal-weight at Morgan Stanley; Price Target: $3.93

• Domain Australia (DHG)

  • Retained at buy at Bell Potter; Price Target: $3.50 from $3.75

  • Retained at neutral at Goldman Sachs; Price Target: $3.40

  • Retained at overweight at Jarden; Price Target: $3.40 from $3.55

  • Downgraded to hold from buy at Jefferies; Price Target: $3.40 from $3.96

  • Retained at underweight at JP Morgan; Price Target: $2.90 from $3.10

  • Retained at neutral at Macquarie; Price Target: $3.20 from $3.30

  • Retained at underweight at Morgan Stanley; Price Target: $2.80

  • Retained at neutral at UBS; Price Target: $3.40 from $3.60

• Goodman Group (GMG)

  • Upgraded to hold from lighten at Ord Minnett; Price Target: $34.00 from $32.00

• GPT Group (GPT)

  • Retained at buy at Citi; Price Target: $4.90

• GQG Partners (GQG)

  • Retained at buy at Goldman Sachs; Price Target: $3.05 from $3.00

  • Retained at outperform at Macquarie; Price Target: $3.20 from $3.05

  • Retained at overweight at Morgan Stanley; Price Target: $3.75

  • Retained at hold at Morgans; Price Target: $3.10 from $3.15

  • Upgraded to buy from accumulate at Ord Minnett; Price Target: $3.30 from $3.29

• GWA Group (GWA)

  • Retained at outperform at Macquarie; Price Target: $3.10

• IGO (IGO)

  • Retained at neutral at Macquarie; Price Target: $5.60

• Iluka Resources (ILU)

  • Retained at neutral at Macquarie; Price Target: $7.00

• James Hardie Industries (JHX)

  • Retained at outperform at Macquarie; Price Target: $64.00

• Lendlease Group (LLC)

  • Retained at buy at Citi; Price Target: $7.10

• Latin Resources (LRS)

  • Downgraded to hold from buy at Bell Potter; Price Target: $0.23 from $0.40

• Lynas Rare Earths (LYC)

  • Retained at outperform at Macquarie; Price Target: $6.80

• Mineral Resources (MIN)

  • Retained at neutral at Macquarie; Price Target: $60.00

• National Australia Bank (NAB)

  • Retained at hold at CLSA; Price Target: $34.40 from $34.50

  • Retained at neutral at Goldman Sachs; Price Target: $34.24 from $34.04

  • Retained at overweight at Jarden; Price Target: $36.00 from $34.00

  • Retained at overweight at JP Morgan; Price Target: $34.80 from $34.30

  • Retained at underperform at Macquarie; Price Target: $32.50

  • Retained at equal-weight at Morgan Stanley; Price Target: $34.20

  • Retained at lighten at Ord Minnett; Price Target: $33.00

• Nufarm (NUF)

  • Retained at hold at Morgans; Price Target: $4.23 from $5.22

• Origin Energy (ORG)

  • Upgraded to buy from hold at Ord Minnett; Price Target: $11.60

• Power (PWH)

  • Retained at hold at Bell Potter; Price Target: $10.50 from $12.50

  • Retained at positive at E&P; Price Target: $12.08 from $13.00

  • Retained at buy at Goldman Sachs; Price Target: $11.50 from $13.40

  • Retained at hold at Moelis Australia; Price Target: $10.97 from $12.61

  • Retained at neutral at UBS; Price Target: $10.20 from $12.00

• REA Group (REA)

  • Retained at buy at Goldman Sachs; Price Target: $221.00

• Reece (REH)

  • Retained at neutral at Citi; Price Target: $26.90

  • Retained at underperform at Macquarie; Price Target: $19.40

• Reliance Worldwide Corporation (RWC)

  • Retained at outperform at Macquarie; Price Target: $6.00

• Suncorp Group (SUN)

  • Retained at neutral at Citi; Price Target: $17.50

  • Retained at buy at UBS; Price Target: $19.00

• Telstra Group (TLS)

  • Retained at overweight at Morgan Stanley; Price Target: $4.40 from $4.20

• Westpac Banking Corporation (WBC)

  • Retained at sell at Citi; Price Target: $24.75

• Woodside Energy Group (WDS)

  • Retained at neutral at Goldman Sachs; Price Target: $33.50 from $32.80

Scans