Evening Wrap: ASX 200 rebounds strongly on miracle resources and energy rally, lithium stocks lead on well received MinRes quarterly

The S&P/ASX 200 closed 60.1 points higher, up 0.77%.

I think most of us are happy to see the end of this week. It was a topsy turvy affair – even after today's rally, and it's probably left many feeling a little perturbed by their portfolio's performance.

And there's still one more major risk event for the week to come with tonight's release of the Federal Reserve's preferred measure of inflation, the PCE Price Index...so remain in a heightened state of alert! 🚨

As usual, for all of the big moves in terms of news, winners and losers, and broker moves, as well as the latest technical analysis on the S&P ASX 200...

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 60.1 points higher at 7,921.3, 0.76% from its session low and just 0.21% from its high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by 185 to 81.

For the week, the XJO finished down 50.3 points or 0.63% lower, 0.76% from its intraweek low and 0.91% from its intraweek high.

Call it bargain hunting, short covering, or blame it on the miniscule bounce in the iron ore price, but something gave the Resources (XJR) (+1.4%) a shove today. Certainly, the iron ore majors stacked on the most index points, with Rio Tinto (ASX: RIO) (+2.7%), BHP Group (ASX: BHP) (+2.2%), and Fortescue (ASX: FMG) (+1.0%) each adding nicely.

Take a look at each of these charts, though, and you will see today’s gain is a drop in the ocean compared to losses since the May commodities peak. The XJR chart is shown below to put today’s move in context. It is a countertrend move.

ASX Resources Sector Index chart

ASX Resources stocks today

Lithium stocks were a standout today. Again, "short covering", "oversold", "too cheap", "cycle is about to turn" – these are all narratives you could apply if you were that way inclined. I am not, of course. I’m a trend follower. Head to the charts for my views on this sector.

But, whatever your persuasion, it was a solid and broad-based rally today. I suspect that Mineral Resources (ASX: MIN) (+3.5%) well received FY24 Q4 Quarterly Activity Report likely provided substantial support here, and perhaps even a delayed response to Pilbara Minerals' (ASX: PLS) quarterly from Wednesday.

Elsewhere, Real Estate (XRE) (+1.3%) and Energy (XEJ) (+0.84%) names also did well, both bouncing back from recent underperformance. Energy enjoyed a modest rally in the crude oil price.

But, to be fair there weren’t too many losers today, with just the defensive Consumer Staples (XSJ) (-0.22%) sector logging a daily decline. What’s interesting here is this move too is a bit of a retracement, given the XSJ has been one of the consistently better performers lately (double interesting is to compare the XSJ and XJR charts since the May high/low – one has benefitted at the expense of the other!).

Consumer Staples Sector Index chart

Gold (XGD) (-2.6%) was another sub-sector of the market that struggled today – to be fair – it's also a defensive sector (or at least gold is considered to be a defensive asset!). A distinct lack of reality resembling promise is the likely explanation here. The gold price tanked yesterday, and this was at odds with early in the week optimism it could take another shot at the highs.

ASX Gold stocks today

ChartWatch

LME Nickel Official Cash

Look out below!

The last time we covered nickel was in ChartWatch in the Evening Wrap on 18 June.

In that update, we looked at the A-shaped reversals in aluminium, copper, and nickel, and put forward that only the opposite could arrest their declines – that is – the V-shaped rally you’ve heard me bang on about for many a ChartWatch now.

Alas, like it’s two base metals brethren, Nickel hasn’t seen the requisite V-shaped rally – or any rally at all for that matter! It is by far and away the worst looking base metal in terms of short and long term trends, as well as in terms of it blasting through all potential points of demand said downtrends’ path.

On Thursday, London Metals Exchange Nickel closed at its lowest point since 30 October 2020 – basically since the beginning of the COVID supply shortage run up (commodities move in cycles everyone!).

The next key point of demand could be the 15k round number – round numbers have a way of triggering excess demand or supply, and below that, there’s very few clear points of demand until the 23 March 2020 major swing low of 11055.

As entrenched as the short and long term downtrends look here, the future is unknown. So, there’s no reason why we can’t see a low before the aforementioned points of demand. However, as always, for any potential low to count, it would want to be followed by a V-shaped rally, and it would want to develop pretty quickly into rising peaks and rising troughs (i.e., supply removal and demand reinforcement).

Ultimately, there’s likely very little to see here until nickel can close back above the dynamic supply of the short term and long term ribbons.

S&P/ASX 200 (XJO)

We need a new 'norm' on the XJO

I know I only did this one yesterday, but I think it’s important to update progress here based on today’s candle and within the context of the 7839-7911 demand zone.

As we’ve discussed here many times, a demand zone is only thus if you see what I call “the fingerprints of demand” there = candles with white bodies and or downward pointing shadows.

So, in this respect let’s go ✅ for today’s white candle.

But! I really would have preferred we closed right on the high to indicate excess demand was sustained all the way into the close, i.e., buyers couldn’t get enough, and I really would have liked us to close even further up yesterday’s big supply-side showing.

Today’s candle is a C+ sort of a thing. Het, it is Friday, and there is a MASSIVE data risk-point coming tonight in the form of the PCE Index – so perhaps it was as good as we were ever going to get.

Monday’s candle really must continue what today started to signal to both the demand and supply sides that recent weakness is the exception – not the norm. The norm is short and long term uptrends. The norm is setting new highs. The norm is an XJO price that starts with an 8, not a 7.

You get my drift!

Economy

Today

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

Later this week

Friday

• 22:30 USA Core PCE Price Index June (+0.2% forecast vs +0.1% in May)

• 22:30 USA Personal Income (+0.4% forecast vs +0.5% in May) & Personal Spending June (+0.3% forecast vs +0.2% in May)

Latest News

Interesting Movers

Trading higher

• +10.0% Peninsula Energy (PEN) - No news, broad resources sector rally

• +6.6% Core Lithium (CXO) - Ditto, but gain here is miniscule compared to long term losses

• +6.4% Fenix Resources (FEX) - Quarterly Activities Report, also check out yesterday's Beebyn-W11 Feasibility Study and Maiden Ore Reserve, a refreshing change to see a rise that's consistent with prevailing short and long term uptrends! 🔎📈

• +5.7% Karoon Energy (KAR) - No news, but perhaps check out yesterday's 2024 Second Quarter Report and Capital returns policy and launch of on-market buy back, also several broker moves including ratings and price target changes - see Broker Notes section below

• +5.6% Develop Global (DVP) - Ditto for the rest of lithium, but perhaps check out yesterday's NEWS

• +5.5% Liontown Resources (LTR) - Ditto lithium

• +4.9% Coronado Global Resources (CRN) - No news, but perhaps check out yesterday's Q2 FY2024 Quarterly Activities Report, also several broker moves including ratings and price target changes - see Broker Notes section below

• +4.8% Austin Engineering (ANG) - FY24 update - Strong cash conversion and order book, a refreshing change to see a rise that's consistent with prevailing short and long term uptrends! (a ChartWatch ASX Scans Uptrends List regular)🔎📈

• +4.3% Deep Yellow (DYL) - Ditto PEN/uranium

• +3.8% Pilbara Minerals (PLS) - Ditto lithium

• +3.7% Firefly Metals (FFM) - Ditto resources bounce

• +3.6% Sims (SGM) - Ditto

• +3.5% Mineral Resources (MIN) - FY24 Q4 Quarterly Activity Report

Trading lower

• -21.6% Bellevue Gold (BGL) - Successful completion of A$150M placement

• -6.0% Droneshield (DRO) - No news, typical of recent volatility

• -5.5% Lotus Resources (LOT) - No news, but perhaps check out yesterday's Drilling Update - Demonstrated Grade Continuity, a refreshing change to see a fall that's consistent with prevailing short and long term downtrends! 🔎📈

• -5.1% Red 5 (RED) - No news, another tough day for ASX gold stocks

• -4.0% Alkane Resources (ALK) - Ditto RED

• -3.5% Regis Resources (RRL) - Ditto gold, but perhaps check out yesterday's Quarterly Activities Report, also several broker moves today, see Broker Notes section below

• -3.1% Northern Star Resources (NST) - Ditto gold, but perhaps check out yesterday's June 2024 Quarterly Activities Report, also several broker moves today, see Broker Notes section below

• -3.1% Perseus Mining (PRU) - Ditto gold

Broker Notes

Audinate Group (AD8)

• Retained at overweight at Morgan Stanley; Price Target: $22.00

Ampol (ALD)

• Upgraded to positive from neutral at E&P; Price Target: $37.00

• Retained at neutral at Goldman Sachs; Price Target: $36.90 from $37.40

• Retained at hold at Jefferies; Price Target: $33.00 from $34.00

• Downgraded to neutral from overweight at JP Morgan; Price Target: $35.00 from $37.00

• Retained at outperform at Macquarie; Price Target: $36.50 from $37.00

• Retained at equal-weight at Morgan Stanley; Price Target: $36.00

• Retained at neutral at UBS; Price Target: $33.00 from $34.25

Arafura Rare Earths (ARU)

• Retained at hold at Bell Potter; Price Target: $0.17 from $0.19

Atturra (ATA)

• Initiated at buy at Moelis Australia; Price Target: $1.25

Black Rock Mining (BKT)

• Retained at buy at Shaw and Partners; Price Target: $0.30 from $0.46

Boss Energy (BOE)

• Retained at buy at Bell Potter; Price Target: $5.75 from $5.90

Chrysos Corporation (C79)

• Downgraded to hold from buy at Bell Potter; Price Target: $5.70 from $7.60

• Retained at buy at Shaw and Partners; Price Target: $7.20 from $7.50

COG Financial Services (COG)

• Retained at buy at Bell Potter; Price Target: $1.75 from $1.70

Cochlear (COH)

• Retained at underperform at Macquarie; Price Target: $300.00 from $255.00

Coles Group (COL)

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

• Retained at buy at UBS; Price Target: $19.50 from $18.25

Coronado Global Resources (CRN)

• Retained at buy at Goldman Sachs; Price Target: $2.14 from $1.98

• Retained at buy at Jefferies; Price Target: $2.20

• Retained at outperform at Macquarie; Price Target: $2.10 from $2.00

• Upgraded to accumulate from hold at Ord Minnett; Price Target: $1.60 from $1.50

• Retained at buy at UBS; Price Target: $1.95

Evolution Mining (EVN)

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

Envirosuite (EVS)

• Retained at buy at Bell Potter; Price Target: $0.08 from $0.10

• Downgraded to marketweight from overweight at Wilsons; Price Target: $0.05 from $0.11

Flight Centre Travel Group (FLT)

• Retained at outperform at Macquarie; Price Target: $25.26 from $26.80

Fortescue (FMG)

• Retained at sell at Bell Potter; Price Target: $17.41 from $20.63

• Retained at sell at Goldman Sachs; Price Target: $15.50 from $16.20

• Retained at neutral at JP Morgan; Price Target: $23.00 from $25.00

• Retained at underperform at Macquarie; Price Target: $14.25 from $14.50

• Retained at underweight at Morgan Stanley; Price Target: $18.70

• Retained at sell at UBS; Price Target: $17.70 from $18.90

IPD Group (IPG)

• Retained at buy at Shaw and Partners; Price Target: $5.50

Karoon Energy (KAR)

• Retained at buy at Barrenjoey; Price Target: $2.27 from $2.47

• Retained at buy at Citi; Price Target: $2.35 from $2.75

• Retained at buy at Jarden; Price Target: $2.25

• Retained at overweight at JP Morgan; Price Target: $2.25

• Retained at outperform at Macquarie; Price Target: $2.40 from $2.45

• Retained at equal-weight at Morgan Stanley; Price Target: $2.00

• Upgraded to outperform from sector perform at RBC Capital Markets; Price Target: $2.25

Medadvisor (MDR)

• Retained at buy at Bell Potter; Price Target: $0.64 from $0.49

Macquarie Group (MQG)

• Retained at sell at Citi; Price Target: $176.00

• Retained at hold at CLSA; Price Target: $201.00

• Retained at neutral at Goldman Sachs; Price Target: $194.47 from $178.74

• Retained at overweight at JP Morgan; Price Target: $215.00 from $205.00

• Retained at overweight at Morgan Stanley; Price Target: $234.00

• Retained at hold at Morgans; Price Target: $192.10 from $189.88

• Retained at neutral at UBS; Price Target: $200.00

Newmont Corporation (NEM)

• Retained at buy at UBS; Price Target: $75.00

Nobleoak Life (NOL)

• Retained at buy at Shaw and Partners; Price Target: $2.85

Northern Star Resources (NST)

• Retained at buy at Citi; Price Target: $15.90

• Upgraded to outperform from hold at CLSA; Price Target: $15.95 from $14.80

• Retained at neutral at Goldman Sachs; Price Target: $14.10 from $14.40

• Downgraded to hold from buy at Jefferies; Price Target: $15.00 from $16.00

• Downgraded to neutral from overweight at JP Morgan; Price Target: $14.25 from $15.00

• Retained at outperform at Macquarie; Price Target: $17.00 from $18.00

• Retained at equal-weight at Morgan Stanley; Price Target: $14.10

• Retained at buy at UBS; Price Target: $16.00

Peninsula Energy (PEN)

• Retained at buy at Shaw and Partners; Price Target: $0.26

Pilbara Minerals (PLS)

• Retained at hold at Bell Potter; Price Target: $3.30 from $3.40

Regis Resources (RRL)

• Retained at neutral at Citi; Price Target: $1.80 from $1.90

• Retained at overweight at Morgan Stanley; Price Target: $2.10

• Retained at neutral at UBS; Price Target: $1.75 from $1.85

Seek (SEK)

• Retained at neutral at Macquarie; Price Target: $23.00

Sandfire Resources (SFR)

• Retained at buy at Canaccord Genuity; Price Target: $11.00

• Retained at neutral at Citi; Price Target: $8.80 from $8.90

• Retained at overweight at Jarden; Price Target: $9.10 from $9.00

• Retained at overweight at JP Morgan; Price Target: $11.00 from $11.40

• Retained at neutral at UBS; Price Target: $9.40 from $10.30

• Upgraded to overweight from marketperform at Wilsons; Price Target: $9.90

Smartpay (SMP)

• Retained at buy at Shaw and Partners; Price Target: $2.20

Strike Energy (STX)

• Retained at buy at Bell Potter; Price Target: $0.32 from $0.31

Syrah Resources (SYR)

• Retained at outperform at Macquarie; Price Target: $0.80 from $0.88

• Retained at buy at Shaw and Partners; Price Target: $0.80 from $1.10

Woolworths Group (WOW)

• Retained at neutral at UBS; Price Target: $34.50 from $32.50

Scans