Evening Wrap: ASX 200 shocked and awed by Israel strike on Iran, gold and oil stocks firmer

Around midday, news broke that Israel had launched a missile strike on Iran. The benchmark S&P/ASX200 lost around 40 points in the next 20 minutes, dipping below 7,500 for the first time since 14 February.

But, as stocks tend to do after the initial shock of an announcement of conflict, they steadily rallied all the way into the close.

Still, the end result for the week was ugly – 221 points sliced off the S&P/ASX200, or -2.9%.

Winners today were few and far between, but were concentrated in the Gold sector as investors diverted more capital to risk-averse assets like Gold.

Losers were plentiful, and were concentrated in the Technology, Financials and Resources sectors.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 74.8 points lower at 7,567.3, smack-bang at the mid-point of the session's range. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by a dismal 41 to 245.

For the week, the XJO finished down 220.8 points or 2.9% lower.

The Gold (XGD) (+0.79%) sub-index was again the best performing sector today, likely in response to a steep rise in the price of gold just after the news from the Middle East broke. Gold prices have since stabilised and are trading around flat on the session at the time of writing. This caused many ASX gold stocks to close well off their highs.

Gold stocks shone today, but many closed well off their session highs

For the second time this week, all 11 of the major ASX sectors were down in the session. Energy (XEJ) (-0.09%) was the least worst, as the news from the Middle East also helped boost crude oil prices. Santos (ASX: STO) (+1.82%) was the best performer among the majors. Coincidentally, today It was retained at outperform at Macquarie with a small price target bump from $9.05 to $9.10.

As for the worst sectors, take your pick from the usual suspects. Information Technology (XIJ) was the worst with a 1.55% today, but a heavy 3.23% loss for the week.

While we're on the topic of worst sectors this week, the XIJ was only third lousiest! The dubious honour of lousiest ASX sector for the week went to Real Estate Investment Trusts (XPJ) (-3.80%), which narrowly edged out Health Care (XHJ) (-3.77%).

ChartWatch

S&P/ASX 200 (XJO)

All hail the long term uptrend ribbon!

Hopefully you’re starting to get the hang of my technical analysis methodology. Follow the trend, respect price action and candles, watch out for how these two behave around key historical points of supply and points of demand.

There’s an important subset within the concept of “points of supply and points of demand”, that is, dynamic supply and dynamic demand. You will find the price encounters dynamic supply and dynamic demand at my short and long term trend ribbons.

On the way up, my trend ribbons act as an invisible (to everyone else!) trampoline from which the price tends to bounce. On the way down, you’ve probably also noticed that with unnerving accuracy – and possibly to your frustration – they act as an invisible hand pushing down rallies.

Look up to the XJO chart, and today we saw how the price interacted with the long term uptrend ribbon (dark green zone). It touched it and bounced. Why? No idea. Nor do I care. I don’t have to understand why something happens to rely on it.

For example, I don’t know how wifi works, but this doesn’t stop me from watching Netflix.

Never assume! The future is unwritten and there’s absolutely no reason why the price must respect my trend ribbons. As is the case with static points of demand and supply which come from historical peaks and troughs, it’s just as important to watch and see how the price action and candles respond at the ribbons.

White candles, and or the lower shadow we witnessed in today’s candle, demonstrate excess demand is indeed manifesting itself at our perceived key level. This is what makes a level support or resistance – and you can only determine this on an ex-post basis.

As long as the price continues to close above the dynamic support of the long term uptrend ribbon, I believe the long term trend in the XJO remains up.

I propose the short term trend is down, and it will be the case until the price closes back above it. Today’s bounce is encouraging, but we still ended with a 50% black candle – that’s concerning enough for me to only think in terms of neutrality for the time being.

Economy

Today/Later this week

• There weren't any major economic data announcements in our time zone today. We also have a very quiet evening with respect to scheduled overseas announcements.

Latest News

Interesting Movers

Trading higher

• +11.4% Predictive Discovery (PDI) - No news, generally stronger ASX gold sector today due to Middle East escalation, rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.4% Bannerman Energy (BMN) - No news, bounced off short term uptrend ribbon, rise is consistent with prevailing long term uptrend 🔎📈

• +4.2% Kingsgate Consolidated (KCN) - No news, generally stronger ASX gold sector today due to Middle East escalation, rise is consistent with prevailing short term uptrend, long term is transitioning from down to up 🔎📈

• +3.3% Metals X (MLX) - No news, tin price was up 4.2% on LME Thursday and is up 24% since 27 March, rise is consistent with prevailing short and long term uptrends 🔎📈

• +2.7% Genesis Minerals (GMD) - No news, generally stronger ASX gold sector today due to Middle East escalation, rise is consistent with prevailing short and long term uptrends 🔎📈

• +2.5% EML Payments (EML) - No news, trying to bounce off LT uptrend ribbon 🔎📈

• +2.2% Macquarie Technology Group (MAQ) - Continued positive response to Wednesday's Completion of $100 million Placement, rise is consistent with prevailing short and long term uptrends 🔎📈

• +1.8% Santos (STO) - No news, generally stronger ASX energy sector today due to Middle East escalation, rise is consistent with prevailing short and long term uptrends 🔎📈

• +1.8% Evolution Mining (EVN) - No news, generally stronger ASX gold sector today due to Middle East escalation, rise is consistent with prevailing short and long term uptrends 🔎📈

• +1.5% MMA Offshore (MRM) - No news, generally stronger ASX energy sector today due to Middle East escalation, rise is consistent with prevailing short and long term uptrends 🔎📈

Trading lower

• -11.6% Piedmont Lithium Inc (PLL) - Sayona Mining (ASX: SYA) large block trade of company's shares: Sale of Troilus Gold Corp Shares, fall is consistent with prevailing short and long term downtrends 🔎📉

• -9.0% Imugene (IMU) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -8.2% Meteoric Resources (MEI) - Tolga Kumova sold ~3% of the company via Change in substantial holding notice

• -7.6% Renascor Resources (RNU) - Native Title Agreement Executed for Siviour Graphite Project, fall is consistent with prevailing long term downtrend 🔎📉

• -7.5% Novonix (NVX) - No news, at risk of closing back below long term trend ribbon

• -6.0% Clinuvel Pharmaceuticals (CUV) - No news, fall is consistent with prevailing long term downtrend 🔎📉

• -5.6% Polynovo (PNV) - No news, fall is consistent with prevailing short term downtrend, falling peaks and falling troughs 🔎📉

• -5.4% Karoon Energy (KAR) - March 2024 Quarterly Report, closed below short term uptrend ribbon 🔎📉

• -5.1% Avita Medical Inc (AVH) - Continued negative response to Tuesday's AVITA Medical Updates Expected First Quarter 2024 Revenue, fall is consistent with prevailing short term downtrend, long term trend is transitioning from up to down 🔎📉

• -5.0% Flight Centre Travel Group (FLT) - No news, fall is consistent with prevailing short term downtrend, falling peaks and falling troughs, closed below long term downtrend ribbon 🔎📉

• -4.9% Netwealth Group (NWL) - Continued negative response to 11 March March 2024 Quarterly Business Update, fall is consistent with prevailing falling peaks and falling troughs 🔎📉

• -4.7% Liontown Resources (LTR) - No news, weaker lithium minerals prices, fall is consistent with prevailing short and long term downtrends 🔎📉

• -4.6% Corporate Travel Management (CTD) - No news, fall is consistent with prevailing short and long term downtrends, closed below major support level from October 2023 🔎📉

Broker Notes

• AIC Mines (A1M) - retained at buy at Shaw and Partners; Price Target: $0.90

• Alcidion Group (ALC) - retained at hold at Bell Potter; Price Target: $0.05

• Australian Unity Office Fund (AOF) - upgraded to buy from hold at Ord Minnett; Price Target: $1.45 from $1.13

• APA Group (APA) - retained at equal-weight at Morgan Stanley; Price Target: $9.18

• APM Human Services International (APM) - retained at buy at Bell Potter; Price Target: $1.40 from $1.93

• Australian Vanadium (AVL) - initiated at buy at Shaw and Partners; Price Target: $0.08

• Alumina (AWC)

  • Retained at neutral at Macquarie; Price Target: $1.40 from $1.30

  • Retained at equal-weight at Morgan Stanley; Price Target: $1.30

• Bellevue Gold (BGL) - downgraded to neutral from outperform at Macquarie; Price Target: $2.00 from $1.90

• BHP Group (BHP)

  • Retained at buy at Citi; Price Target: $48.00

  • Retained at underperform at CLSA; Price Target: $45.00 from $43.50

  • Retained at buy at Goldman Sachs; Price Target: $49.00 from $49.20

  • Retained at overweight at JP Morgan; Price Target: $52.00

  • Retained at neutral at Macquarie; Price Target: $42.00

  • Retained at equal-weight at Morgan Stanley; Price Target: $47.00

  • Retained at add at Morgans; Price Target: $48.30 from $47.60

  • Retained at sector perform at RBC Capital Markets; Price Target: $45.00

  • Retained at neutral at UBS; Price Target: $44.00 from $45.00

• Challenger (CGF)

  • Retained at buy at Goldman Sachs; Price Target: $7.50

  • Retained at neutral at Macquarie; Price Target: $7.20 from $7.00

  • Retained at equal-weight at Morgan Stanley; Price Target: $7.20

• Chorus (CNU)

  • Retained at outperform at Macquarie; Price Target: NZ$8.32

  • Upgraded to neutral from sell at UBS; Price Target: NZ$7.25

• Deterra Royalties (DRR) - retained at neutral at Macquarie; Price Target: $4.50

• Global Lithium Resources (GL1) - retained at buy at Shaw and Partners; Price Target: $2.20

• Genesis Minerals (GMD) - retained at outperform at Macquarie; Price Target: $2.00

• Growthpoint Properties Australia (GOZ) - retained at buy at Citi; Price Target: $2.60

• IDP Education (IEL) - retained at overweight at Barrenjoey; Price Target: $26.00

• Arcadium Lithium (LTM) - retained at at Macquarie; Price Target: $10.00

• Mount Gibson Iron (MGX) - retained at outperform at Macquarie; Price Target: $0.50

• Mineral Resources (MIN) - retained at at Macquarie; Price Target: $79.00

• MMA Offshore (MRM) - retained at hold at Shaw and Partners; Price Target: $2.60

• Netwealth Group (NWL) - downgraded to sell from neutral at Citi; Price Target: $18.65 from $18.35

• Orora (ORA) - retained at overweight at Morgan Stanley; Price Target: $2.90

• Patriot Battery Metals (PMT) - retained at at Macquarie; Price Target: $2.00

• Premier Investments (PMV) - retained at buy at Bell Potter; Price Target: $35.00

• Pantoro (PNR) - retained at hold at Bell Potter; Price Target: $0.08 from $0.04

• Resmed Inc (RMD)

  • Retained at buy at Citi; Price Target: $34.00

  • Retained at outperform at Macquarie; Price Target: $34.30 from $33.45

  • Retained at overweight at Morgan Stanley; Price Target: $31.80

• Santana Minerals (SMI) - retained at buy at Bell Potter; Price Target: $2.15 from $1.90

• SRG Global (SRG) - retained at buy at Shaw and Partners; Price Target: $1.20

• Santos (STO)

  • Retained at outperform at Macquarie; Price Target: $9.10 from $9.05

  • Retained at equal-weight at Morgan Stanley; Price Target: $8.00

• Transurban Group (TCL) - retained at equal-weight at Morgan Stanley; Price Target: $13.68

Scans