Evening Wrap: ASX 200 is the epitome of a "Dead Cat Bounce" as tech, banks slide continues, resources, gold and energy rally

The S&P/ASX 200 closed 21.2 points lower, down 0.25%.

If you bought the dip yesterday or today, then there's a good chance whatever you bought continued to dip 😭.

Aussie stocks clearly weren't considered "bargains" just yet by investors, as seven of the eleven major sectors showed continuations of yesterday's losses. Gold, energy, and resources stocks rallied, though, as did property – but the big banks and insurers continued to slide. There was also no respite for the ailing tech sector, either.

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 21.2 points higher at 8,447.9, 0.48% from its session high and smack–bang on its session low 😭. In the broader-based S&P/ASX 300 (XKO) advancers lagged decliners by 124 to 152.

Today's best blue chip gainers

Today's worst blue chip losers

ChartWatch

S&P/ASX 200 (XJO)

Analysis

One of my favourite market metaphors is the "Dead Cat Bounce".

Basically, it goes like this (the subject matter isn't pretty, I didn't make it up – I own two cats – I'm not a cat hater!):

Drop a dead cat from high enough and even it will bounce a little...

Or:

Q. How high will a dead cat bounce? A. Not very much!

Either version of the metaphor can be applied to today's performance of the XJO a.k.a. the "Old Tin Pot".

Yesterday, it was dropped from a great height... and today... well... um... it didn't even bounce!!!

What does that say about our poor dead cat? 🙀

This really is the worst kind of price action for those who are still hopeful of a quick bounce – or even just a steadying of the sinking ship (metaphors galore today!).

The typical human nature of a large drop in the price of an asset is this: "Oh my... that must be cheap!!!" 🤔

As in... pineapples at Woolies were six bucks each last week, and this week they're on special for 50 cents. You're probably going to buy a bunch of pineapples because you can be pretty certain they'll be back up to six bucks next week. Piña Colada all round!!! 🍹

I love pineapples, and I adore Piña Coladas!

But stocks aren't pineapples, people – they're giant balls of risk!

Sure, the price of pineapples probably is going to go back up next week – but we can't always say the same about stocks.

In the stock market – if a stock is considered cheap by the investors that matter (i.e., not you and not me), then there will be greater demand for its shares than supply of its shares... MOTN (More Often Than Not) that stock's price will be going up.

If however, those same investors think it's still overvalued, there'll be scant demand and motivated supply of its shares. If some demand does happen to pop up (maybe from punters who ignorantly say silly things like: "Oh my... that must be cheap!!!" – it's going to be pounced upon by the big investors who still want out. 🥊

So, after a big drop like yesterday, instead of a rush of "Oh my... that must be cheap!!!" buying, you just get more selling. The proverbial cat doesn't bounce very high – or as was the case today – it doesn't bounce at all... ⚠️

Anyways, enough metaphors – because we don't need any of those previously mentioned verbose ones – we have the simplest and most effective metaphor for demand and supply in the stock market ever devised (not by me, but I like to think I've honed it a little!): Trends + Price Action + Candles + Volatility + Volume.

Check list time!!! 📋

(Consistent with demand-side control = ✅ vs Consistent with supply-side control = ❌)

1. Short and long term trend ribbons: ⬇️/↔️, short term expanding / getting stronger vs long term contracting / getting weaker, the price is below both ribbons and both ribbons are acting as a zone of dynamic excess supply = ❌❌ (long term ❌ on basis of price is below it, plus it transitioned to neutral (amber) today!).

2. Price action: Falling peaks and falling troughs (i.e., demand removal and supply reinforcement) = ❌.

3. Candles: Supply-side control (i.e., black-bodied candles and or upward pointing shadows) = ❌.

4. Volume: No substantially above average volume days on strong demand-side candles potentially indicating supply exhaustion and major buy the dip activity = ❌.

❌❌❌❌❌ = Supply-side control of short and long term OTP price.

View

What's the significance of supply-side control of the price? That's simple: It means that MOTN the price will fall. Not CERTAIN the price will fall – they might invent nuclear fusion tomorrow and Old Tin Pot opens trading at 20,000. Hey – anything is possible!

In practical terms, though, if one believes that MOTN the price of a stock market is going to decline, then it makes sense one has as little risk exposure to that stock market as possible.

For me, this means I can fill my ASX stocks "Risk Bucket" to one-third full, or "1/3RP" as I like to call it 🪣 (i.e., my personal allowable capital allocation limit (Risk Position) for my investments in Australian stocks is 33%).

Key levels

8421 is the closest point of demand. The long term trend ribbon is the closest zone of supply (presently 8543-8685). The short term downtrend ribbon is, however, the critical zone of supply (presently 8810-8865). In the absence of other confirming demand-side control signals, the XJO must close back above this point to demonstrate the demand-side is moving back into control.

ChartWatch *LIVE* Webinar Replay 📺

If you couldn't make it to today's ChartWatch *LIVE* Webinar, or you just want to revisit some of my analysis on risk management and dozens of ASX stocks, then be sure to check out the YouTube recording below. If you love ChartWatch, and you know someone who would get some value out of learning the ChartWatch model, be sure to share it on your favourite socials! 🤗

Economy

Today

• AUS September Wage Price Index

  • +0.8% q/q and +3.4% p.a. vs +0.8% q/q forecast and +0.8% q/q in June)

  • In line with forecast and unchanged from last quarter.

  • Commentary: "Wages growth is considered a lagging economic indicator; therefore, it is not unexpected that wage outcomes in the past year have been decent and positive real wages growth has helped lift consumer sentiment. But it is clear that the momentum has slowed, especially as seen in private sector wages, following recent easing in the labour market." —My Bui, Economist, AMP

Later this week

Thursday

• 06:00 USA Federal Reserve November FOMC Meeting Minutes

• 12:00 CHN People's Bank of China Loan Prime Rate (LPR)

  • 1-year LPR: Forecast no change at 3% p.a.

  • 5-year LPR: Forecast no change at 3.5% p.a.

Friday

• 00:30 USA October Non-Farm Payrolls

• 02:00 USA October Existing Home Sales (4.11 million forecast vs 4.06 million in September)

• 09:00 AUS November Flash Manufacturing & Services Purchasing Managers Index (PMI)

  • Manufacturing: vs 49.7 in October

  • Services: vs 52.5 in October

Saturday

• 01:45 USA November Flash Manufacturing & Services Purchasing Managers Index (PMI)

  • Manufacturing: vs 52.5 in October

  • Services: vs 54.8 in October

Latest News

Interesting Movers

Trading higher

• +16.6% Webjet Group (WJL) – 1H26 Investor presentation and Receipt of Non Binding Indicative Offer from Helloworld.

• +16.1% Argosy Minerals (AGY) – No news, general strength across the broader Lithium sector today, rise is consistent with prevailing short-term uptrend and long-term trend is transitioning from down to up, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +12.9% Nyrada (NYR) – No news since 18-Nov Nyrada Phase IIa Clinical Trial Update.

• +10.7% Nufarm (NUF) – Nufarm FY25 Results Investor Presentation and CEO Transition.

• +10.0% Galan Lithium (GLN) – No news, general strength across the broader Lithium sector today, rise is consistent with prevailing short-term uptrend and long-term trend is transitioning from down to up, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +10.0% Rox Resources (RXL) – Vesting of Performance Rights, general strength across the broader Precious Metals sector today.

• +9.9% Focus Minerals (FML) – No news, general strength across the broader Precious Metals sector today, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +9.8% Global Lithium Resources (GL1) – No news, general strength across the broader Lithium sector today, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +9.1% Nova Minerals (NVA) – No news, rise is consistent with prevailing short and long-term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +9.1% GQG Partners (GQG) – No news...

• +8.3% PYC Therapeutics (PYC) – No news since 18-Nov Annual General Meeting Presentation.

• +7.4% Lake Resources (LKE) – No news, general strength across the broader Lithium sector today, rise is consistent with prevailing short-term uptrend and long-term trend is transitioning from down to up, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +5.7% Wildcat Resources (WC8) – Bolt Cutter Central Lithium Discovery Grows To 900M Strike, general strength across the broader Lithium sector today, rise is consistent with prevailing short-term uptrend and long-term trend is transitioning from down to up, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +5.6% Lynas Rare Earths (LYC) – No news but 2 x broker rating upgrades today along with 2 x price target increases (see Broker Moves below), general strength across the broader Rare Earths & Critical Minerals sector today.

Trading lower

• –19.6% Droneshield (DRO) – Resignation of U.S. CEO, fall is consistent with prevailing short-term downtrend and falling peaks and falling troughs 🔎📉

• –9.2% Vulcan Energy Resources (VUL) – Positive start to Phase One Lionheart field development and Change in substantial holding.

• –8.2% Artrya (AYA) – No news, today’s move is consistent with recent volatility.

• –8.0% Ausgold (AUC) – Fully Underwritten Placement and SPP to Advance KGP.

• –7.5% Catapult Sports (CAT) – Continued negative response to 18-Nov 1H FY26 Results CEO & MD, CFO Addresses.

• –6.7% Resolution Minerals (RML) – No news since 18-Nov Institutional Roadshow Presentation.

• –5.6% Megaport (MP1) – No news since 18-Nov SPP Offer Booklet, general weakness across the broader Information Technology sector today.

Broker Moves

Astral Resources NL (AAR)

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

Aussie Broadband (ABB)

• Downgraded to neutral from outperform at Macquarie; Price Target: $5.10 from $6.35

Amplitude Energy (AEL)

• Retained at buy at Morgans; Price Target: $3.45 from $0.31

ALS (ALQ)

• Retained at buy at Bell Potter; Price Target: $25.00 from $23.50

• Retained at outperform at Macquarie; Price Target: $22.85 from $19.26

• Retained at buy at Morgans; Price Target: $25.30 from $24.60

• Retained at accumulate at Ord Minnett; Price Target: $22.60 from $20.95

• Retained at sector perform at RBC Capital Markets; Price Target: $22.25 from $20.75

BlueScope Steel (BSL)

• Retained at outperform at Macquarie; Price Target: $25.50 from $25.35

Catapult Sports (CAT)

• Retained at buy at Bell Potter; Price Target: $6.50 from $7.50

• Retained at outperform at CLSA; Price Target: $7.00 from $8.00

• Upgraded to positive from neutral at E&P; Price Target: $6.03 from $7.33

• Retained at overweight at Morgan Stanley; Price Target: $6.50 from $7.90

EML Payments (EML)

• Retained at outperform at RBC Capital Markets; Price Target: $1.40

FireFly Metals (FFM)

• Retained at speculative buy at Canaccord Genuity; Price Target: $2.50 from $2.15

• Retained at outperform at Macquarie; Price Target: $2.30 from $1.70

Goodman Group (GMG)

• Retained at buy at Citi; Price Target: $40.00

GPT Group (GPT)

• Retained at outperform at Macquarie; Price Target: $6.23 from $6.27

Helia Group (HLI)

• Retained at underperform at Macquarie; Price Target: $3.95

Ingenia Communities Group (INA)

• Retained at neutral at UBS; Price Target: $6.28

James Hardie Industries Plc (JHX)

• Retained at buy at Citi; Price Target: $37.20 from $36.50

• Retained at overweight at Jarden; Price Target: $39.00

• Retained at buy at Jefferies; Price Target: $46.00

• Retained at outperform at Macquarie; Price Target: $41.70 from $40.60

• Upgraded to buy from accumulate at Morgans; Price Target: $35.50 from $38.50

• Retained at sector perform at RBC Capital Markets; Price Target: $33.00 from $37.00

Karoon Energy (KAR)

• Downgraded to hold from buy at Morgans; Price Target: $1.80

LGI (LGI)

• Retained at accumulate at Morgans; Price Target: $4.84 from $4.20

LendLease Group (LLC)

• Retained at buy at Citi; Price Target: $6.70

• Retained at equal-weight at Morgan Stanley; Price Target: $6.58

Lynas Rare Earths (LYC)

• Upgraded to buy from neutral at Goldman Sachs; Price Target: $16.60 from $13.70

• Upgraded to buy from neutral at UBS; Price Target: $17.80 from $15.10

Metals X (MLX)

• Retained at buy at Ord Minnett; Price Target: $1.05

Mitchell Services (MSV)

• Retained at speculative buy at Morgans; Price Target: $0.45

Mayfield Group Holdings (MYG)

• Retained at buy at Bell Potter; Price Target: $2.30 from $2.00

Northern Star Resources (NST)

• Retained at neutral at Citi; Price Target: $24.00

Nufarm (NUF)

• Retained at sector perform at RBC Capital Markets; Price Target: $2.75

REA Group (REA)

• Retained at neutral at Macquarie; Price Target: $220.00

Steadfast Group (SDF)

• Downgraded to neutral from outperform at Macquarie; Price Target: $4.90 from $7.00

Sandfire Resources (SFR)

• Retained at accumulate at Ord Minnett; Price Target: $17.30 from $16.50

Stockland (SGP)

• Retained at buy at Citi; Price Target: $6.90

Sigma Healthcare (SIG)

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

Santana Minerals (SMI)

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

Smart Parking (SPZ)

• Retained at buy at Shaw and Partners; Price Target: $1.50

Santos (STO)

• Retained at hold at Morgans; Price Target: $6.80

Technology One (TNE)

• Retained at hold at Bell Potter; Price Target: $33.00 from $38.50

• Upgraded to outperform from hold at CLSA; Price Target: $36.50 from $39.50

• Downgraded to overweight from buy at Jarden; Price Target: $32.00 from $44.82

• Upgraded to overweight from neutral at JPMorgan; Price Target: $35.00 from $38.50

• Retained at neutral at Macquarie; Price Target: $28.20 from $34.40

• Upgraded to overweight from equal-weight at Morgan Stanley; Price Target: $36.50 from $29.30

• Upgraded to accumulate from hold at Morgans; Price Target: $34.50 from $43.50

• Retained at hold at Ord Minnett; Price Target: $29.78 from $33.04

• Upgraded to buy from hold at Shaw and Partners; Price Target: $37.30 from $36.60

Woodside Energy Group (WDS)

• Retained at buy at Morgans; Price Target: $30.60

Scans