Evening Wrap: ASX 200 gain hides "abysmal" underlying statistic as banks boom on WBC result, critical minerals slide continues

The S&P/ASX 200 closed 12.9 points higher, up 0.15%.

Banks, tech, and consumer discretionary up – resources down. It's becoming a well worn script (or vice versa!). Perhaps the most telling aspect of today's trade, though, was the "abysmal" market breadth. There were double the number of stocks losing ground today compared to those rising – with many of the losers coming from the critical minerals and lithium sectors...

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 economic data in tonight's Evening Wrap.

Also, I have detailed technical analysis on the S&P/ASX 200 in today's ChartWatch.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 12.9 points higher at 8,894.8, 0.74% from its session low and smack–bang on its session high 🥳. BUT! Don’t get too excited everyone! In the broader-based S&P/ASX 300 (XKO) advancers lagged decliners by dismal 98 to 182.

Fund flows: Swings and roundabouts

It feels like if you find Information Technology (XIJ) (+1.7%), Financials (XFJ) (+1.3%), and Consumer Discretionary (XDJ) (+0.2%) at the top of the daily sector performance table, then you’re also going find Resources (XJR) (-0.7%) at the bottom (Old Tin Pot remember – equals what is given to Peter must be taken from Paul!) There’s only so much love to around for Aussie stocks… 😭

Banks generally got a boost from Westpac's full year results – and that boost was super influential on XJO index points:

• Westpac Banking Corp. (WBC) (+2.8%)

• Commonwealth Bank of Australia. (CBA) (+2.3%)

• Bendigo and Adelaide Bank (BEN) (+1.6%)

• Bank of Queensland (BOQ) (+1.0%)

• National Australia Bank (NAB) (+0.9%)

• ANZ Group Holdings (ANZ) (+0.8%)

In resources, the majors were lacklustre but not terrible (Rio Tinto (RIO) (0.0%), BHP Group (BHP) (-0.2%), Fortescue (FMG) (-1.1%)), with the bulk of the damage occurring in critical minerals and lithium stocks:

• Lynas Rare Earths (LYC) (-8.1%)

• Pilbara Minerals (PLS) (-5.2%)

• IGO (IGO) (-2.8%)

• Mineral Resources (MIN) (-2.6%)

Outside of the above "banks, tech, and consumer discretionary up-vs-resources down dynamic", the Gold Sub-Index (XGD) (-1.4%) continued its volatile ways – today ebbing rather than flowing – and one sector that seems to be down most days now is Health Care (XHJ) (-1.7%). The CSL (CSL) (-1.7%) dip started dipping again...

One final note about the day's trade: The most important and telling item for me was the market abysmal market breadth of 98 gainers to 182 decliners (👎+⚠️). It told the story today though – what might have looked like an up day from the intraday chart above and the benchmark’s 12 point gain – was definitely far from a glowing endorsement of Aussie shares…

Today's best blue chip gainers

Today's worst blue chip losers

ChartWatch

S&P/ASX 200 (XJO)

S&P/ASX 200 chart (click here for full size image)

On Friday we noted how well the short term uptrend ribbon defined the exact point where the Old Tin Pot’s morning rally stopped – and went into reverse. We know that when the price trades below the trend ribbons, the trend ribbons MOTN act as zones of dynamic excess supply. Dynamic… because they’re always moving.

MOTN (More Often Than Not)

It doesn't mean ALWAYS!

But we look at today, and whist not a trend ribbon, this time it was one of the zones I’ve identified as an area of static demand (not moving!) that’s also perfectly defined where excess demand has kicked in – and changed the direction of price!

At 11:15am, the XJO’s price was steadily declining – in keeping with Friday’s bearish reversal and supply-side control. It entered the zone of demand at 8809-43 (light green zone) and rallied… all day… into the close… to close at the session high.

= Downward pointing shadow (the shadow points to where latent demand is lurking in the system, remember!?)

But here’s the thing about the trend ribbons and zones of demand / supply: They’re tentative, or suspected, until they’re confirmed by the price action. So, until they’re confirmed by the candles.

• Like Friday’s upward pointing shadow (i.e., confirming the short term trend ribbon as a zone of dynamic excess supply).

• Like today’s downward pointing shadow (i.e., confirming 8809-43 as a zone of excess demand).

So, we look to these points in the very short term to help us determine where the next pressure points are for the XJO’s price action – and by definition – where we could see confirmation of demand -or supply-side control.

As for everything else, trends (short term neutral vs long term up), price action (falling peaks and falling troughs), and candles (predominantly supply-side since the 9116 peak) – remain the same – and suggest an environment of cautious bullishness (!!!).

View: I remain comfortable at 2/3RP (2/3 Risk Position = My personal allowable capital allocation limit for my investments in Australian stocks is 67%).

Key levels: 8809-43 is the next key level that the price ideally should not cross (a likely move to 1/2RP on a close below there); but ultimately, 8731 remains the critical go-no-go zone for the XJO bull market = ⚠️. A close above the short term uptrend ribbon (presently 8933-8952) would help confirm the demand-side remains active in the system.

Economy

Today

• October ANZ Job Advertisements: -2.2% m/m vs -3.5% in September

• September Building Approvals: +12.0% m/m vs +5.1% m/m forecast and -3.6% m/m in August

• September Household Spending: +0.2% m/m vs +0.5% m/m forecast and +0.1% m/m in August

Later this week

Tuesday

• 02:00 USA October ISM Manufacturing PMI (49.4 forecast vs 49.1 previous)

• 14:30 AUS RBA Cash Rate & Monetary Policy Statement (no change at 3.6% forecast – expect a hawkish tone!)

Wednesday

• USA tentative due to US government shutdown – JOLTS Job Openings

Thursday

• 02:00 USA October ISM Services PMI (50..8 forecast vs 50.0 previous)

Friday

• No major economic announcements expected this day

Saturday

• USA tentative due to US government shutdown – Core PCE Price Index m/m

• USA tentative due to US government shutdown – Non-Farm Employment Change

Latest News

Interesting Movers

Trading higher

• +75.0% Mount Ridley Mines (MRD) - Appointment of Chief Executive Officer.

• +17.4% Locksley Resources (LKY) - LKY Receives up to US$191M Potential Support from EXIM Bank.

• +17.1% Lumos Diagnostics Holdings (LDX) - No news, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +8.8% Navigator Global Investments (NGI) - No news, initiated at buy at UBS with a price target of $3.40.

• +8.7% Nova Minerals (NVA) - No news.

• +7.6% Megaport (MP1) - No news, rise is consistent with prevailing short and long term uptrends, added to ChartWatch ASX Scans Uptrends list on Friday 🔎📈

• +7.5% Mayne Pharma Group (MYX) - No news, rebounded after yesterday’s sharp sell-off due to MYX Scheme of Arrangement update on FIRB approval.

Trading lower

• -12.3% Dateline Resources (DTR) - Ceasing to be a substantial holder, general weakness across the broader Critical Minerals sector today, (Jalana Pty Limited), today’s move is consistent with recent volatility.

• -10.1% Felix Gold (FXG) - No news since 31-Oct Quarterly Activities and Cashflow Reports, general weakness across the broader Precious Metals sector today, today’s move is consistent with recent volatility.

• -9.4% Australian Strategic Materials (ASM) - No news, general weakness across the broader Critical Minerals sector today, today’s move is consistent with recent volatility.

• -8.9% Stakk (SKK) - No news 31-Oct Quarterly Activities/Appendix 4C Cash Flow Report, today’s move is consistent with recent volatility.

• -8.3% 4DMEDICAL (4DX) - No news, today’s move is consistent with recent volatility.

• -8.2% Coronado Global Resources (CRN) - No news, today’s move is consistent with recent volatility.

• -8.1% Lynas Rare Earths (LYC) - No news, general weakness across the broader Critical Minerals sector today, today’s move is consistent with recent volatility.

Broker Moves

Astral Resources NL (AAR)

• Retained at buy at Shaw and Partners; Price Target: $0.45

Abacus Group (ABG)

• Retained at hold at Ord Minnett; Price Target: $1.10

Aeris Resources (AIS)

• Retained at speculative buy at Ord Minnett; Price Target: $0.62 from $0.66

Ampol (ALD)

• Retained at overweight at Morgan Stanley; Price Target: $34.00 from $30.00

Alkane Resources (ALK)

• Retained at accumulate at Ord Minnett; Price Target: $1.40 from $1.50

Aristocrat Leisure (ALL)

• Retained at overweight at Morgan Stanley; Price Target: $73.70 from $72.20

Ama Group (AMA)

• Retained at buy at Bell Potter; Price Target: $0.13

Ansell (ANN)

• Retained at equal-weight at Morgan Stanley; Price Target: $37.20

ANZ Group Holdings (ANZ)

• Retained at neutral at Citi; Price Target: $37.00

• Retained at neutral at Macquarie; Price Target: $34.00

• Retained at trim at Morgans; Price Target: $32.80 from $32.72

• Downgraded to lighten from hold at Ord Minnett; Price Target: $30.00

Aspen Group (APZ)

• Retained at buy at Bell Potter; Price Target: $4.85

Arena REIT (ARF)

• Retained at buy at Ord Minnett; Price Target: $4.20

Abacus Storage King (ASK)

• Retained at hold at Ord Minnett; Price Target: $1.40

BETR Entertainment (BBT)

• Retained at buy at Ord Minnett; Price Target: $0.46

Bendigo and Adelaide Bank (BEN)

• Retained at underperform at Macquarie; Price Target: $10.75

Bank of Queensland (BOQ)

• Retained at underperform at Macquarie; Price Target: $5.90

Brightstar Resources (BTR)

• Retained at buy at Shaw and Partners; Price Target: $1.21

Bubs Australia (BUB)

• Retained at hold at Bell Potter; Price Target: $0.17

• Retained at accumulate at Ord Minnett; Price Target: $0.18

• Retained at buy at Shaw and Partners; Price Target: $0.20

Commonwealth Bank of Australia (CBA)

• Retained at underperform at Macquarie; Price Target: $106.00

Cobram Estate Olives (CBO)

• Retained at accumulate at Ord Minnett; Price Target: $3.51 from $3.44

Charter Hall Group (CHC)

• Retained at hold at Ord Minnett; Price Target: $21.35

Camplify Holdings (CHL)

• Retained at buy at Morgans; Price Target: $1.00 from $1.05

• Retained at buy at Ord Minnett; Price Target: $0.71 from $0.67

Centuria Industrial REIT (CIP)

• Retained at buy at Bell Potter; Price Target: $3.65

• Retained at hold at Ord Minnett; Price Target: $3.45

Charter Hall Long Wale REIT (CLW)

• Retained at hold at Ord Minnett; Price Target: $4.25 from $4.20

Centuria Capital Group (CNI)

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

• Retained at hold at Ord Minnett; Price Target: $2.10

Centuria Office REIT (COF)

• Retained at sell at Bell Potter; Price Target: $1.10

Coles Group (COL)

• Retained at overweight at Morgan Stanley; Price Target: $26.60 from $26.80

Charter Hall Social Infrastructure REIT (CQE)

• Retained at buy at Ord Minnett; Price Target: $3.55

Charter Hall Retail REIT (CQR)

• Retained at hold at Ord Minnett; Price Target: $4.20

Capstone Copper Corp. (CSC)

• Retained at outperform at Macquarie; Price Target: $16.50 from $17.10

• Upgraded to buy from accumulate at Morgans; Price Target: $16.10 from $16.30

Digico Infrastructure REIT (DGT)

• Retained at hold at Bell Potter; Price Target: $3.20

• Retained at buy at Ord Minnett; Price Target: $3.95 from $3.90

Dexus Convenience Retail REIT (DXC)

• Retained at buy at Bell Potter; Price Target: $3.45

Dexus Industria REIT (DXI)

• Retained at buy at Bell Potter; Price Target: $3.10

Dexus (DXS)

• Retained at accumulate at Ord Minnett; Price Target: $7.55

Endeavour Group (EDV)

• Upgraded to buy from hold at Bell Potter; Price Target: $4.30 from $4.55

• Retained at equal-weight at Morgan Stanley; Price Target: $4.50

• Retained at hold at Morgans; Price Target: $3.70 from $4.15

• Retained at neutral at UBS; Price Target: $3.90 from $4.25

Electro Optic Systems Holdings (EOS)

• Retained at speculative buy at Ord Minnett; Price Target: $11.18

GDI Property Group (GDI)

• Retained at buy at Bell Potter; Price Target: $0.85

Gemlife Communities Group (GLF)

• Retained at buy at Bell Potter; Price Target: $5.55

Goodman Group (GMG)

• Retained at buy at Bell Potter; Price Target: $40.80

• Retained at hold at Ord Minnett; Price Target: $33.50 from $33.70

Growthpoint Properties Australia (GOZ)

• Retained at accumulate at Ord Minnett; Price Target: $2.55

GPT Group (GPT)

• Retained at hold at Ord Minnett; Price Target: $5.30 from $5.40

GWA Group (GWA)

• Retained at outperform at Macquarie; Price Target: $3.00 from $3.05

HealthCo Healthcare and Wellness REIT (HCW)

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

HomeCo Daily Needs REIT (HDN)

• Retained at hold at Bell Potter; Price Target: $1.40

• Retained at accumulate at Ord Minnett; Price Target: $1.45

HMC Capital (HMC)

• Retained at hold at Bell Potter; Price Target: $3.60

• Retained at buy at Ord Minnett; Price Target: $5.25 from $5.35

Insurance Australia Group (IAG)

• Retained at buy at UBS; Price Target: $9.65

Integral Diagnostics (IDX)

• Retained at buy at Bell Potter; Price Target: $4.00

Insignia Financial (IFL)

• Retained at equal-weight at Morgan Stanley; Price Target: $5.00 from $4.80

Iluka Resources (ILU)

• Retained at overweight at Morgan Stanley; Price Target: $8.60

Image Resources NL (IMA)

• Retained at outperform at Macquarie; Price Target: $0.13 from $0.14

Ingenia Communities Group (INA)

• Retained at hold at Ord Minnett; Price Target: $5.95

JB Hi-Fi (JBH)

• Retained at underweight at Morgan Stanley; Price Target: $97.50 from $101.80

Judo Capital Holdings (JDO)

• Retained at outperform at Macquarie; Price Target: $1.90

Jumbo Interactive (JIN)

• Downgraded to overweight from buy at Jarden; Price Target: $13.70 from $14.10

• Retained at buy at Morgans; Price Target: $16.60 from $15.90

Jupiter Mines . (JMS)

• Retained at outperform at Macquarie; Price Target: $0.29

Lifestyle Communities (LIC)

• Retained at hold at Bell Potter; Price Target: $5.70

• Retained at hold at Ord Minnett; Price Target: $5.60

LendLease Group (LLC)

• Retained at hold at Ord Minnett; Price Target: $5.85

Lotus Resources (LOT)

• Retained at outperform at Macquarie; Price Target: $0.28

• Retained at speculative buy at Ord Minnett; Price Target: $0.38 from $0.35

Mach7 Technologies (M7T)

• Retained at buy at Morgans; Price Target: $0.81

MAAS Group Holdings (MGH)

• Downgraded to accumulate from buy at Morgans; Price Target: $5.45

Mirvac Group (MGR)

• Retained at hold at Ord Minnett; Price Target: $2.35

Mineral Resources (MIN)

• Retained at overweight at Morgan Stanley; Price Target: $53.50

National Australia Bank (NAB)

• Retained at neutral at Macquarie; Price Target: $38.00

Navigator Global Investments (NGI)

• Initiated at buy at UBS; Price Target: $3.40

NIB Holdings (NHF)

• Retained at underperform at Macquarie; Price Target: $5.50

Noumi (NOU)

• Retained at buy at Bell Potter; Price Target: $0.19

National Storage REIT (NSR)

• Retained at accumulate at Ord Minnett; Price Target: $2.45

Northern Minerals (NTU)

• Retained at speculative buy at Ord Minnett; Price Target: $0.07 from $0.07

Origin Energy (ORG)

• Retained at buy at Citi; Price Target: $13.00

• Retained at hold at Ord Minnett; Price Target: $12.20 from $12.00

Paladin Energy (PDN)

• Retained at overweight at Morgan Stanley; Price Target: $10.40

Region Group (RGN)

• Retained at buy at Bell Potter; Price Target: $2.70

• Retained at hold at Ord Minnett; Price Target: $2.35

ResMed Inc. (RMD)

• Retained at overweight at Morgan Stanley; Price Target: $305.00 from $304.00

• Retained at accumulate at Morgans; Price Target: $47.04 from $47.86

Scentre Group (SCG)

• Retained at hold at Ord Minnett; Price Target: $3.80 from $3.90

Steadfast Group (SDF)

• Downgraded to hold from buy at Ord Minnett; Price Target: $5.80 from $6.65

Sandfire Resources (SFR)

• Retained at underweight at Morgan Stanley; Price Target: $11.45

SGH (SGH)

• Retained at hold at Bell Potter; Price Target: $52.00 from $51.00

Stockland (SGP)

• Retained at hold at Ord Minnett; Price Target: $5.80

Santana Minerals (SMI)

• Retained at buy at Shaw and Partners; Price Target: $1.63

Sunstone Metals (STM)

• Retained at buy at Shaw and Partners; Price Target: $0.05 from $0.04

Summit Minerals (SUM)

• Retained at buy at Bell Potter; Price Target: $15.25

Sovereign Metals (SVM)

• Downgraded to hold from speculative buy at Argonaut Securities; Price Target: $0.70 from $0.90

Turaco Gold (TCG)

• Retained at outperform at Macquarie; Price Target: $0.80

The Lottery Corporation (TLC)

• Retained at sell at Citi; Price Target: $5.00

Tuas (TUA)

• Retained at buy at Citi; Price Target: $9.95

Vicinity Centres (VCX)

• Retained at accumulate at Ord Minnett; Price Target: $2.55

Viva Energy Group (VEA)

• Retained at equal-weight at Morgan Stanley; Price Target: $2.03 from $2.15

Vulcan Energy Resources (VUL)

• Retained at speculative buy at Canaccord Genuity; Price Target: $10.00 from $9.75

Westpac Banking Corporation (WBC)

• Retained at neutral at Citi; Price Target: $37.75

• Retained at underperform at Macquarie; Price Target: $31.50

• Retained at neutral at UBS; Price Target: $38.00

Wesfarmers (WES)

• Retained at equal-weight at Morgan Stanley; Price Target: $92.60 from $93.50

Westgold Resources (WGX)

• Retained at buy at Ord Minnett; Price Target: $6.60

Waypoint REIT (WPR)

• Retained at accumulate at Ord Minnett; Price Target: $2.70

Xero (XRO)

• Retained at buy at UBS; Price Target: $203.00 from $215.00

Scans