Evening Wrap: ASX 200 slides on thin holiday trade, but small-cap critical minerals and precious metals melt-up continues

The S&P/ASX 200 closed 6.0 points lower, down 0.07%.

Sure, it was a quiet day today with NSW out for a public holiday, but there was still plenty of action beneath the surface of the ASX 200's modest 6 point decline. Unfortunately, with more stocks down than up – it wasn't all good! But, there were some stonking gains in small-cap mining stocks – how about +127% in European Lithium (EUR)!? You might think that's an outlier, but massive gains at the small end of town are becoming all too common these days 🔥🔥🔥.

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 6.0 points lower at 8,981.4, % from its session high/low and just % from its high/low. In the broader-based S&P/ASX 300 (XKO) advancers lagged decliners by 106 to 159 – I suggest far worse than -6.0 points suggests!

Fund flows: "Resources more generally"…

Pretty quiet today with NSW out of action. Gold (XGD) (+1.7%) was good, as were Resources (XJR) (+0.55%) more generally – but that’s something we’ve come to expect of late… A modest rebound in Utilities (XUJ) (+0.44%) and Energy (XEJ) (+0.31%) post poor performances in those sectors last week – perhaps some value-based buying through there – or just ebb and flow…

Information Technology (XIJ) (-1.4%) tracked the Comp’s dip on Friday, that dip also likely undermined Pro Medicus (PME) (-3.1%) which dragged on Healthcare (XHJ) (-0.91%) (but I note that CSL’s (CSL) (-1.0%) dip keeps dipping!). Consumer stocks Staples (XSJ) (-0.53%) and Discretionary (XDJ) (-0.52%) are likely faltering on rapidly evaporating RBA rate cut hopes! 😭

Stock specifics: Value investing using trend following

What’s value? Is it the biggest decliner in the ASX 100 today – Treasury Wine Estates (TWE) (-4.0%) with 6 x current major broker BUY ratings (1 sell)? Or is it the biggest gainer in the ASX 100 today – Lynas Rare Earths (LYC) (+7.2%) with 5 x current major broker SELL ratings (2 buys)? 🤔

Treasury Wine Estates (TWE) chart (click here for full size image)

I can honestly say that I have no idea which stock represents better value – because I haven’t checked. But I do regularly check on the trends of each of these stocks = What the demand-supply environment thinks about their respective value.

TWE: 25x Feature Downtrend (i.e., my model’s highest conviction to reduce risk / sell short) since its long term downtrend began in November 2024 (starting with the 11-Nov candle which closed at 11.01). There’s been countless regular Downtrends Scan List appearances since then also.

Lynas Rare Earths (LYC) chart (click here for full size image)

LYC: 20x Feature Uptrend (i.e., my model’s highest conviction to increase risk / go long) since its long term uptrend began in March (starting with the 17-Mar candle which closed at 7.61). There’s been countless regular Uptrends Scan List appearances since then also.

But as I always say, it’s pure coincidence that a stock’s trend continues for any length of time after I’ve pointed out it exists. It just is. If it isn’t, I manage my risk and move on to the next opportunity. Looking at today's Biggest Gainers lists here, and further down for the broader market – there are PLENTY! And I don't want to miss out by retaining risk in charts that are in downtrends...

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)

No Sydney today… so I’m not going to read anything into today’s failure to hold those highs. 🙈

In theory, it’s a supply side candle, but my hunch is that tomorrow you’ll see the real demand-supply environment shape the price action in a far more meaningful way.

Conclusion: ✅✅✅ = I prefer to stay the course here at FRP (Full Risk Position = My personal allowable capital allocation limit for my investments in Australian stocks is 100%)

Key levels: 8991-9055 is the key zone of supply, I will be very watchful for signs of excess supply in there. 8731 is the most important near-term point of demand, the price should not close below here if the demand-side is in control of the XJO’s price = ⚠️

Economy

Today

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

Later this week

Tuesday

• ALL DAY CHN Bank Holiday

• 10:30 October Westpac Consumer Sentiment (-3.1% in September)

• 11:30 September ANZ Job Advertisements (+0.1% in August)

Wednesday

• ALL DAY CHN Bank Holiday

Thursday

• 04:00 USA 10-y Bond Auction

• 05:00 USA September FOMC Meeting Minutes

• 11:00 AUS September MI Inflation Expectations (+4.7% p.a. in August)

• 23:30 USA Federal Reserve Chairman Jerome Powell speaks

Friday

• 12:00 AUS RBA Governor Michelle Bullock speaks

• 22:30 (Tentative due to shutdown) USA September Non-farm Payrolls

  • Non-Farm Employment Change: +52,000 forecast vs +22,000 in August

  • Average Hourly Earnings: +0.3% m/m forecast vs +0.3% m/m in August

  • Unemployment Rate: +4.3% forecast vs +4.3% in August

Saturday

• 01:00 USA October Preliminary UoM Consumer Sentiment (54.6 forecast vs 55.1 previous)

• 01:00 USA October Preliminary UoM Inflation Expectations (+4.7% p.a. in September)

Latest News

Interesting Movers

Trading higher

• +127.3% European Lithium (EUR) - Expiry of Quoted Options and Replacement Options Offer and continued positive response to 03-Oct EUR to Undertake On-Market Share Buy-Back, rise is consistent with prevailing short and long term uptrends 🔎📈

• +64.6% Cobalt Blue (COB) - Continued positive response to 02-Oct Repayment of Promissory Note.

• +26.9% Encounter Resources (ENR) - Outstanding High-Grade Niobium Intersections Expand Green, 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 🔎📈

• +24.2% Novonix (NVX) - No news, general strength across the broader Critical Minerals sector today.

• +23.5% Yandal Resources (YRL) - Continued positive response to 01-Oct $13.5m Placement to Expand and Accelerate Exploration, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +23.1% Painchek (PCK) - No news, rise is consistent with prevailing short and long term uptrends, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +17.7% Australian Strategic Materials (ASM) - No news, general strength across the broader Critical Minerals sector today.

• +16.7% Trigg Minerals (TMG) - No news, general strength across the broader Critical Minerals sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +16.5% 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 🔎📈

• +16.0% Cygnus Metals (CY5) - Continued positive response to 02-Oct Chibougamau Resource Update Presentation, general strength across the broader Precious Metals sector today, rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up 🔎📈

• +11.6% Arafura Rare Earths (ARU) - No news, general strength across the broader Critical Minerals sector today, rise is consistent with prevailing short and long term uptrends, added to ChartWatch ASX Scans Uptrends list yesterday 🔎📈

• +10.8% Rapid Critical Metals (RCM) - No news, general strength across the broader Critical Minerals sector today, rise is consistent with prevailing short term uptrend and rising peaks and rising troughs 🔎📈

• +10.7% Droneshield (DRO) - No news, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +10.7% Investigator Resources (IVR) - No news since 03-Oct $10M Placement to Fast-Track Paris Silver Project, 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 🔎📈

• +10.7% Boab Metals (BML) - Boab Metals to Pursue U.S. OTCQB Listing, 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 🔎📈

• +10.6% Brazilian Rare Earths (BRE) - Continued positive response to 03-Oct Amargosa Bauxite-Gallium - 568 Mt Maiden Mineral Resource, general strength across the broader Critical Minerals sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

Trading lower

• -15.0% Stakk (SKK) – Stakk raises $15m via institution-led placement, today’s move is consistent with recent volatility.

• -14.6% Echoiq (EIQ) – Category III CPT code application update, fall is consistent with prevailing short-term downtrend and long-term trend is transitioning from up to down 🔎📉

• -12.7% GBM Resources (GBZ) – Sale of White Dam Gold Project, pulled back in the wake of recent sharp rally.

• -10.3% Altech Batteries (ATC) – No news, pulled back after Friday’s sharp rally due to UPS Batteries For Explosive (EX & ATEX) Environments.

• -6.9% LTR Pharma (LTP) – LTR increases LevOmega stake to 43% with $1m investment.

• -6.2% Mesoblast (MSB) – No news, pulled back after Friday’s sharp rally due to Ryoncil Receives CMS (Medicaid) J-Code for Reimbursement.

Broker Moves

AMP (AMP)

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

Amotiv (AOV)

• Retained at buy at UBS; Price Target: $11.00 from $10.90

Eagers Automotive (APE)

• Retained at hold at Bell Potter; Price Target: $31.25 from $24.00

• Retained at sell at UBS; Price Target: $18.70 from $17.00

ARB Corporation (ARB)

• Retained at neutral at UBS; Price Target: $39.60 from $35.00

Autosports Group (ASG)

• Retained at neutral at UBS; Price Target: $3.15 from $1.80

ASX (ASX)

• Retained at sell at UBS; Price Target: $62.15

AUB Group (AUB)

• Retained at neutral at UBS; Price Target: $35.50

Bendigo and Adelaide Bank (BEN)

• Retained at neutral at UBS; Price Target: $13.00

BHP Group (BHP)

• Retained at neutral at UBS; Price Target: $43.00

Bank of Queensland (BOQ)

• Retained at sell at UBS; Price Target: $6.50

Brambles (BXB)

• Retained at neutral at UBS; Price Target: $25.65 from $25.90

Commonwealth Bank of Australia (CBA)

• Retained at sell at UBS; Price Target: $125.00

Challenger (CGF)

• Retained at buy at UBS; Price Target: $9.60

Capricorn Metals (CMM)

• Retained at buy at Canaccord Genuity; Price Target: $13.55

Computershare (CPU)

• Retained at sell at UBS; Price Target: $41.20

CSL (CSL)

• Retained at buy at UBS; Price Target: $300.00

Digico Infrastructure REIT (DGT)

• Retained at hold at Bell Potter; Price Target: $3.20 from $3.00

• Retained at buy at UBS; Price Target: $4.90

GQG Partners Inc. (GQG)

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

HUB24 (HUB)

• Retained at neutral at UBS; Price Target: $112.00

Insurance Australia Group (IAG)

• Retained at buy at UBS; Price Target: $29.65

Iluka Resources (ILU)

• Retained at overweight at Morgan Stanley; Price Target: $6.40

L1 Group (L1G)

• Retained at neutral at UBS; Price Target: $0.79

Magellan Financial Group (MFG)

• Retained at neutral at UBS; Price Target: $10.70

Medibank Private (MPL)

• Retained at neutral at UBS; Price Target: $5.25

Macquarie Group (MQG)

• Retained at neutral at UBS; Price Target: $225.00

NIB Holdings (NHF)

• Retained at neutral at UBS; Price Target: $8.60

Netwealth Group (NWL)

• Retained at neutral at UBS; Price Target: $33.50

Pinnacle Investment Management Group (PNI)

• Retained at neutral at UBS; Price Target: $19.80

Perpetual (PPT)

• Retained at neutral at UBS; Price Target: $22.50

Palmer Tube Mills (PTM)

• Retained at neutral at UBS; Price Target: $0.79

PEXA Group (PXA)

• Retained at buy at UBS; Price Target: $17.45

QBE Insurance Group (QBE)

• Retained at buy at UBS; Price Target: $24.70

Steadfast Group (SDF)

• Retained at buy at UBS; Price Target: $7.00

Select Harvests (SHV)

• Retained at buy at UBS; Price Target: $5.30

Suncorp Group (SUN)

• Retained at buy at UBS; Price Target: $23.15

Scans