Evening Wrap: ASX 200 notches new record as (pretty much) every lithium and battery stock rallied!

Any day when the S&P/ASX 200 makes a new all time high is a good day. But there are variations on the theme.

A day where we blitz to a new high in the morning, only to fade all session into the close, smacks of dumb money rushing in and smart money taking advantage of elevated liquidity and pricing.

But, when we steadily gain all session, and close on the high (a new record high), it suggests all money is unafraid of higher prices, and they likely still have some shopping to do.

Let’s dive in!

Markets

ASX 200 Session Chart

The S&P/ASX200 (XJO) finished points 46.9 higher at 7,745.6, smack bang on its session high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by 166 to 104. For the week, the XJO finished up 102 points or 1.32% higher.

The Materials (XMJ) (+2.0%) sector was the best performing sector today, likely in response to a resurgent lithium and battery minerals sector. The rally which we've been covering all week really broadened out today.

No doubt also helping, the prices of key base metals Aluminium, Copper, Nickel and Zinc each bounced nicely on Thursday on the London Metals Exchange. Iron ore is a touch higher in Asian trade.

Lovely lithium!

Also doing well today was the Information Technology (XIJ) (+1.9%) sector. It wasn't a unanimous rise, though, with a substantial discrepancy between the likes of Life360 (360) which surged a whopping 38.5% on better than expected FY23 results, and Audinate Group (AD8) which suffered a 7.2% pullback after its recent rapid results-fueled ascent.

Key tech stocks went in opposite directions today

ChartWatch

S&P/ASX200 (XJO)

Records are made to be broken

I couldn't not put this one in given the new high today. The only thing I have to add to yesterday's analysis is to comment on the nature of today's candle. Which, if you're a bull, is very good.

As discussed in the intro, a white bodied candle with a close at the session high is indicative of unquenched excess demand. Even better, given we're at a new all time high you have to assume those buying, and for me: those who are still so clearly looking to buy, aren't afraid by "high" prices.

The old..."But surely stocks are too expensive up here" argument is therefore moot. But the future is unknown, and the price action will tell us when excess supply has returned. In this regards, keep an eye out for black-bodied candles and or upward pointing shadows.

Xero Ltd (XRO) (XJO)

A picture of excess demand

There were plenty of wonderful charts to choose from, but Xero is my favourite today. What a fantastic exhibition of excess demand. Well established and accelerating short and long term uptrends, great price action (higher peaks and higher troughs), and predominantly demand-side candles.

Today's candle was particularly a cracker! Even better, it appears we have dispensed with any excess supply which may have been lurking around the historical major peak of 127.68. This level (which coincides with where excess demand took control this morning) should now act as a point of demand going forward.

Novonix Ltd (NVX)

No longer a picture of excess supply

I deliberately wanted to contrast Xero with Novonix, that is, a well-established long term uptrend versus a stock which has for so long been a picture of excess supply.

Note, my model can never pick the bottom. It's impossible - I am a trend follower, and at the bottom of any major decline the trend is down!

To buy, I must first wait for the tell-tale signs demand is creeping back in, sometimes slowly to first neutralise the prevailing supply, and then to dominate it. I can see signs the tide of excess supply might be changing for Novonix.

Lower peaks and lower troughs are now higher peaks and higher troughs. Predominantly black candles are being replaced by more frequent and more substantial white candles. The short term trend ribbon has swung from down to up, and the price action is challenging the long term trend ribbon which has transitioned to neutral.

Economy

Today

• USA: Core PCE Price Index +0.4% in January vs +0.4% forecast & +0.2% previous

• CHN: Manufacturing PMI 49.1 in February vs 49.1 forecast & 49.2 previous

• CHN: Non-Manufacturing PMI 51.4 in February vs 50.7 forecast & 50.7 previous

• CHN: Caixin Manufacturing PMI 50.9 in February vs 50.7 forecast & 50.8 previous

Later this week

• Friday

  • EU: Eurozone Core Consumer Price Index CPI (+2.9% p.a. forecast vs +3.3% p.a. previous)

• Saturday

  • USA: ISM Manufacturing PMI (49.5 forecast vs 49.1 previous)

Latest News

Interesting Movers

Trading higher

• +38.5% Life360 (360) - Full Year 2023 Results

• +23.1% Argosy Minerals (AGY) - No news, lithium short squeeze and rally broadening out…

• +16.7% Galileo Mining (GAL) - No news, lithium short squeeze and rally broadening out…

• +16.5% Platinum Asset Management (PTM) - First Half FY24 Results

• +15.9% Novonix (NVX) - Full Year 2023 Results, lithium/battery minerals & tech short squeeze and rally broadening out…

• +15.5% Metals X (MLX) - On-Market Share Buy-Back, bouncing off long term downtrend ribbon

• +14.3% Core Lithium (CXO) - No news, lithium short squeeze and rally broadening out…

• +13.1% Syrah Resources (SYR) - Syrah signs Balama binding offtake with Posco Future, lithium/battery minerals & tech short squeeze and rally broadening out…

• +12.7% Vulcan Energy Resources (VUL) - No news, lithium short squeeze and rally broadening out…

• +12.5% Lake Resources (LKE) - Response to ASX Query Letter, lithium short squeeze and rally broadening out…

• +12.5% Sayona Mining (SYA) - No news, lithium short squeeze and rally broadening out…

• +11.5% Ioneer (INR) - No news, lithium short squeeze and rally broadening out…

• +10.9% Global Lithium Resources (GL1) - No news, lithium short squeeze and rally broadening out…

• +10.3% Arcadium Lithium (LTM) - Form 10-K Annual Report, lithium short squeeze and rally broadening out…

• +9.5% Piedmont Lithium Inc (PLL) - Annual Report, lithium short squeeze and rally broadening out…

• +9.2% Nickel Industries (NIC) - Full Year 2023 Results yesterday, retained at buy at Citi & retained at outperform at Macquarie (see Broker Moves)

• +8.0% Pepper Money (PPM) - Full Year 2023 Results yesterday, upgraded to outperform from neutral at Macquarie (see Broker Moves)

• +7.1% Neometals (NMT) - No news, lithium/battery minerals & tech short squeeze and rally broadening out…

• +6.0% Galan Lithium (GLN) - No news, lithium/battery minerals & tech short squeeze and rally broadening out…

• +6.0% Xero (XRO) - Continued positive response to investor day, 4 x buy/overweight ratings from brokers (see Broker Moves)

Trading lower

• -8.0% Collins Foods (CKF) - Downgraded to sell from neutral at Citi; Price Target: $10.60 from $11.93

• -7.8% Bannerman Energy (BMN) - Only so much hot money to go around? Lithium's gain is Uranium's loss? Sector belted today…

• -7.4% Deep Yellow (DYL) - No news, only so much hot money to go around? Lithium's gain is Uranium's loss? Sector belted today…

• -7.2% Audinate Group (AD8) - No news, has been on a massive run post-results, also suspect a little start of the month books squaring 🤔

• -6.6% Calix (CXL) - No news, no partaking in sector rally, just a fall which is consistent with the prevailing short and long term downtrends

• -6.3% Adriatic Metals (ADT) - No news 🤔

• -5.7% Bega Cheese (BGA) - No news, has been on a massive run post-results, also suspect a little start of the month books squaring 🤔

• -5.7% Nuix (NXL) - No news, has been on a massive run post-results, also suspect a little start of the month books squaring 🤔

• -5.5% Lotus Resources (LOT) - No news, only so much hot money to go around? Lithium's gain is Uranium's loss? Sector belted today…

• -5.2% Maas Group Holdings (MGH) - No news, only so much hot money to go around? Lithium's gain is Uranium's loss? Sector belted today…

• -5.0% Nextdc (NXT) - No news, only so much hot money to go around? Lithium's gain is Uranium's loss? Sector belted today…

• -5.0% Boss Energy (BOE) - No news, only so much hot money to go around? Lithium's gain is Uranium's loss? Sector belted today…

Broker Notes

• Australian Clinical Labs (ACL) retained at accumulate at Ord Minnett; Price Target: $3.50

• Australian Finance Group (AFG)

  • Upgraded to neutral from sell at Citi; Price Target: $1.50

  • Retained at neutral at Macquarie; Price Target: $1.47 from $1.54

• Ainsworth Game Technology (AGI)

  • Upgraded to underperform from sell at CLSA; Price Target: $1.24 from $1.21

  • Retained at outperform at Macquarie; Price Target: $1.45 from $1.35

• Atlas Arteria (ALX)

  • Retained at neutral at Barrenjoey; Price Target: $5.70 from $5.60

  • Retained at buy at Jefferies; Price Target: $6.37 from $6.42

  • Retained at neutral at Macquarie; Price Target: $5.44 from $5.80

  • Retained at hold at Morgans; Price Target: $5.63 from $5.61

• Autosports Group (ASG) retained at buy at Citi; Price Target: $3.15 from $3.10

• Capitol Health (CAJ) retained at buy at Ord Minnett; Price Target: $0.31 from $0.03

• City Chic Collective (CCX) retained at equalweight at Morgan Stanley; Price Target: $0.50 from $0.40

• Collins Foods (CKF) downgraded to sell from neutral at Citi; Price Target: $10.60 from $11.93

• Doctor Care Anywhere Group (DOC) retained at buy at Bell Potter; Price Target: $0.12 from $0.07

• Harvey Norman Holdings (HVN)

  • Retained at buy at Citi; Price Target: $5.50 from $5.00

  • Retained at sell at CLSA; Price Target: $4.40 from $3.15

  • Upgraded to neutral from negative at E&P; Price Target: $4.63

  • Retained at hold at Jefferies; Price Target: $4.60 from $3.90

  • Retained at neutral at Macquarie; Price Target: $5.10 from $4.40

  • Retained at underweight at Morgan Stanley; Price Target: $3.50

  • Retained at lighten at Ord Minnett; Price Target: $4.00 from $3.90

  • Retained at buy at UBS; Price Target: $5.50 from $4.75

• Jupiter Mines (JMS) retained at outperform at Macquarie; Price Target: $0.25

• Karoon Energy (KAR)

  • Retained at buy at Citi; Price Target: $3.00

  • Retained at outperform at Macquarie; Price Target: $2.65 from $2.60

  • Retained at overweight at Morgan Stanley; Price Target: $2.49

  • Retained at accumulate at Ord Minnett; Price Target: $2.65

• Kelsian Group (KLS) retained at buy at UBS; Price Target: $7.70 from $7.90

• Mystate (MYS) initiated at buy at Ord Minnett; Price Target: $3.95

• Nickel Industries (NIC)

  • Retained at buy at Citi; Price Target: $0.80

  • Retained at outperform at Macquarie; Price Target: $1.10

• Nextdc (NXT)

  • Retained at outperform at Macquarie; Price Target: $20.00 from $17.00

  • Retained at lighten at Ord Minnett; Price Target: $14.00 from $12.00

• Orica (ORI) downgraded to neutral from buy at Citi; Price Target: $18.50 from $17.00

• Pepper Money (PPM)

  • Retained at neutral at Citi; Price Target: $1.55 from $1.40

  • Upgraded to outperform from neutral at Macquarie; Price Target: $1.70 from $1.35

• Platinum Asset Management (PTM) retained at neutral at UBS; Price Target: $1.20

• Qualitas Real Estate Income Fund (QRI) retained at buy at Citi; Price Target: $1.60

• RAM Essential Services Property Fund (REP) retained at buy at Ord Minnett; Price Target: $0.74 from $0.75

• Ramsay Health Care (RHC)

  • Retained at at Barrenjoey; Price Target: $52.40 from $49.50

  • Retained at neutral at Citi; Price Target: $56.50 from $51.00

  • Retained at at CLSA; Price Target: $58.00 from $56.50

  • Downgraded to neutral from overweight at JPMorgan; Price Target: $57.50 from $60.00

  • Retained at neutral at Macquarie; Price Target: $53.35 from $52.00

  • Retained at at Morgan Stanley; Price Target: $55.00 from $49.60

  • Retained at at Morgans; Price Target: $60.76 from $59.76

• Rio Tinto (RIO) retained at neutral at UBS; Price Target: $125.00

• Resolute Mining (RSG) retained at outperform at Macquarie; Price Target: $0.56 from $0.57

• South32 (S32)

  • Retained at buy at Citi; Price Target: $3.50 from $3.45

  • Upgraded to outperform from neutral at Macquarie; Price Target: $3.40 from $3.10

  • Retained at overweight at Morgan Stanley; Price Target: $3.60

  • Retained at accumulate at Ord Minnett; Price Target: $3.50 from $3.60

  • Retained at buy at UBS; Price Target: $3.95 from $3.75

• The Star Entertainment Group (SGR)

  • Retained at overweight at Barrenjoey; Price Target: $0.68 from $0.70

  • Retained at outperform at CLSA; Price Target: $0.59 from $0.62

  • Retained at outperform at Macquarie; Price Target: $0.70 from $0.75

  • Retained at add at Morgans; Price Target: $0.70

  • Retained at neutral at UBS; Price Target: $0.57 from $0.63

• Select Harvests (SHV) retained at buy at Ord Minnett; Price Target: $5.41 from $5.09

• Supply Network (SNL) retained at buy at Ord Minnett; Price Target: $19.20 from $17.00

• Service Stream (SSM) upgraded to outperform from neutral at Macquarie; Price Target: $1.25 from $0.91

• Strike Energy (STX) retained at neutral at Macquarie; Price Target: $0.21 from $0.22

• Southern Cross Media Group (SXL)

  • Retained at neutral at Macquarie; Price Target: $0.94 from $1.00

  • Retained at underweight at Morgan Stanley; Price Target: $0.70

  • Retained at buy at Ord Minnett; Price Target: $1.70

• Westgold Resources (WGX) retained at outperform at Macquarie; Price Target: $2.50

• Xero (XRO)

  • Retained at buy at Goldman Sachs; Price Target: $152.00 from $141.00

  • Retained at buy at Jefferies; Price Target: $147.38 from $119.09

  • Retained at overweight at JP Morgan; Price Target: $130.00

  • Retained at buy at UBS; Price Target: $139.90

Scans