Evening Wrap: ASX 200 slides on Treasury Wine Estates plunge, as gold, silver and critical minerals stocks surge

The S&P/ASX 200 closed 75.5 points lower, down 0.84%.

Gold and silver stocks rebounded emphatically from Friday's sell off as investors appetite for risk-averse assets like precious metals sent the prices of both gold and silver soaring in Asian trade. Critical minerals stocks were also in high demand, with many making double-digit share price gains.

In stock specific news, the biggest loser on so many levels today was Treasury Wine Estates (TWE). No doubt long-suffering investors have had a gutful of management's underperformance, culminating with today's disappointing progress update.

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 75.5 points lower at 8,882.8, 0.85% from its session high and just 0.17% from its low. In the broader-based S&P/ASX 300 (XKO) advancers lagged decliners by a dismal 69 to 207.

Fund flows: Sticking with the script

Nothing too mind-blowing as per fund flows today. Looking down the bottom of the sector performance list was Information Technology (XIJ) (-2.0%) and Healthcare (XHJ) (-1.2%). They've been down there all too frequently lately. To be fair, Financials (XFJ) (-1.2%) haven't been terrible recently, but they had an off day today.

Energy (XEJ) (-1.2%) has been terrible recently, as has Utilities (XUJ) (-0.93%), and these two rounded out the list of worst performers.

Only the Gold sub-index (XGD) (+2.3%) managed a gain today as both gold and silver rallied in Asian trade – likely on the back of risk aversion and flows away from equities. Real Estate (+0.3%) was the only major sector index to close in the black.

Stock Specific: Who would have thunk it in a million years 🤷

The biggest loser on so many levels today was Treasury Wine Estates (ASX-TWE). No doubt long-suffering investors have had a gutful of management's underperformance, culminating with today's disappointing progress update and inability to provide revised guidance due to "uncertainty that remains as to the outlook". It's still popular with the big brokers, though, with 6 buys heading into today's announcement at last check.

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

If only there was a way for average investors like us to tell that something wasn't quite right with TWE? That perhaps, it was more likely to report bad news than good news...? 🤔

If only. But I will leave you with this thought: TWE has appeared 28 times since 29 May 2024 as a Feature Downtrend (i.e., my highest conviction to reduce risk / short sell) in my ChartWatch ASX Scans. The close of the 29 May 2024 candle was $11.10, the close of the last Feature Downtrend on 6 October was $6.77. Today's close was $5.93. 28 times in 16 months (and countless other regular Downtrend Scan List appearances). Yes, if only there was a way...📉

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)

Are we relieved or disappointed by that performance today? I mean, if you were told on Saturday morning after you saw that massive black candle on the Comp chart that we’d only be down 0.84% on the close?

While I’m at it, can I get a poll for what was the first word you thought or muttered after you saw the said Comp candle? Fairy floss? Flying frisbees? Holy shift-alt-delete? 🤔

Yep, me too! 😉

Whilst today’s XJO decline of 0.84% is not terrible, I feel it’s still disappointing due to the fact we opened down 0.55%, then rallied to down just 0.3%. So, it seemed there was some demand in the system around the open – even in the face of “that candle”.

But the demand either softened for the rest of the day, or if it did continue to fight – it was overwhelmed by supply – leaving us with a starting-to-look-a-bit-nasty black candle with a close far too close to the low for my liking.

• Demand withdrawing; or

• If it was bravely hanging around – still being overwhelmed by supply.

Neither is a desirable outcome today. But as I said in the Comp analysis which you can read here, I need some confirmation of which way the demand-supply environment wants to swing before making any adjustments to my risk management settings.

Looking purely at the XJO’s technicals (i.e., cut the rhetoric and gut feel!), we can see:

• Short term trend is neutralised due to falling peaks and falling troughs (6 & 9-Oct candles are the peaks, 8-Oct candle is the trough, today’s low is below that trough… so the next one… wherever it lands… must be lower!).

• Long term trend is up.

• Price action is very modest supply side in nature (those peaks and troughs are miniscule… more broadly… it’s looking more and more like a trading range between 8731-9055).

• Candles are back to mixed after today… I propose today's candle is just enough to nullify the promising move out of the 8731-8893 trading range.

So, it’s looking a lot more like short term equilibrium vs long term demand-side control. It’s an “invested but vigilant, constantly monitoring the risks” type of environment.

I don’t want to see a close below the short term uptrend ribbon. I certainly don’t want to see a close below 8731 – that item in particular would be a deal-breaker.

Conversely, a quick resolution back to demand-side control, i.e., a long white candle off the short term uptrend ribbon is the best possible outcome. Which do you think is the most likely scenario? 🤔

Yep, me too! 😉

Economy

Today

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

• USA Markets closed for Columbus Day

Later this week

Tuesday

• 11:30 AUS RBA September Monetary Policy Meeting Minutes

• 11:30 AUS NAB Business Confidence

Wednesday

• 03:20 USA Federal Reserve Chairman Jerome Powell Speaks

• 12:30 CHN September Consumer Price Index (CPI) & Producer Price Index (PPI)

  • CPI: -0.2% p.a. forecast vs -0.4% p.a. in August

  • PPI: -2.3% p.a. forecast vs -2.9% p.a. in August

Thursday

• 06:45 AUS RBA Gov Bullock Speaks

• 11:30 AUS September Employment Change & Unemployment Rate

  • Employment Change: +20,000 forecast vs -5,400 in August

  • Unemployment Rate: 4.3% forecast vs 4.2% in August

• 23:30 (Tentative due to shutdown) USA September Core PPI

• 23:30 (Tentative due to shutdown) USA September Retail Sales

Friday

• 23:30 (Tentative due to shutdown) USA September Building & Housing Permits

Latest News

Interesting Movers

Trading higher

• +38.5% Toro Energy (TOE) - IsoEnergy to Acquire Toro Energy and Joint Investor Presentation, rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up 🔎📈

• +37.5% Australian Rare Earths (AR3) - No news, general strength across the broader Critical Minerals sector today, rise is consistent with prevailing short and long term uptrends 🔎📈

• +36.4% Cobalt Blue Holdings (COB) - No news, general strength across the broader Critical Minerals 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 🔎📈

• +31.4% Nova Minerals (NVA) - Continued positive response to 10-Oct Land Use Secured for Antimony Refinery at Port MacKenzie, 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 🔎📈

• +31.0% Manuka Resources (MKR) - Response to ASX price query letter, rise is consistent with prevailing short and long term uptrends 🔎📈

• +30.1% Australian Strategic Materials (ASM) - No news, general strength across the broader Critical Minerals 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 🔎📈

• +22.0% Northern Minerals (NTU) - 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 🔎📈

• +19.4% Argent Minerals (ARD) - No news, general strength across the broader Precious Metals sector today, rise is consistent with prevailing short and long term uptrends 🔎📈

• +18.3% Arafura Rare Earths (ARU) - Continued positive response to 10-Oct Upsized Share Purchase Plan Results, general strength across the broader Critical Minerals sector today, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +18.2% Ionic Rare Earths (IXR) - Proposed issue of securities, general strength across the broader Critical Minerals sector today, rise is consistent with prevailing short and long term uptrends 🔎📈

• +18.1% Sun Silver (SS1) - Sun Silver updates Australian Govt for US President meeting, 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 🔎📈

• +18.0% American Rare Earths (ARR) - Successful Completion-Impurity Removal Neutralization Tests, general strength across the broader Critical Minerals sector today, rise is consistent with prevailing short and long term uptrends, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +17.4% St George Mining (SGQ) - A$72.5m raised for Araxa Rare Earths-Niobium Project, 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 🔎📈

• +15.6% European Lithium (EUR) - EUR sells further 3.85million CRML shares for US$50m (A$76m), 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 🔎📈

• +15.0% Sunshine Metals (SHN) - Record High Grade Intersection at Sybil - 4.4m @ 57.51g/t Au, general strength across the broader Precious Metals sector today, rise is consistent with prevailing short and long term uptrends 🔎📈

Trading lower

• -15.0% Treasury Wine Estates (TWE) - Update on F26 performance expectations, fall is consistent with prevailing short and long term downtrends, one of the most Featured (highest conviction) stocks in ChartWatch ASX Scans Downtrends list 🔎📉

• -13.3% G50 Corp (G50) - No news, pulled back in the wake of recent sharp rally.

• -12.5% Forrestania Resources (FRS) - No news, pulled back in the wake of recent sharp rally.

• -10.5% Hillgrove Resources (HGO) - Change in substantial holding (Freepoint Metals & Concentrates 18.9% to 15%), fall is consistent with prevailing short and long term downtrends 🔎📉

• -10.2% Winsome Resources (WR1) - No news, fall is consistent with prevailing long term downtrend 🔎📉

• -10.0% Stakk (SKK) - Change of Director's Interest Notices, today's move is consistent with recent volatility.

Broker Moves

MP (AMP)

• Retained at buy at Citi; Price Target: $2.00

Eagers Automotive (APE)

• Upgraded to hold from underperform at Jefferies; Price Target: $29.50 from $18.00

Bendigo and Adelaide Bank (BEN)

• Retained at sell at Citi; Price Target: $11.00

BHP Group (BHP)

• Retained at overweight at Morgan Stanley; Price Target: $48.00

Boss Energy (BOE)

• Retained at underweight at Morgan Stanley; Price Target: $1.85

Bank of Queensland (BOQ)

• Retained at neutral at Citi; Price Target: $6.60

COG Financial Services (COG)

• Retained at buy at Bell Potter; Price Target: $2.70 from $2.25

Deterra Royalties (DRR)

• Retained at equal-weight at Morgan Stanley; Price Target: $4.35

Evolution Mining (EVN)

• Retained at sell at UBS; Price Target: $8.10 from $7.90

Fortescue (FMG)

• Retained at overweight at Morgan Stanley; Price Target: $21.20

GQG Partners Inc. (GQG)

• Retained at outperform at Macquarie; Price Target: $2.50 from $2.55

• Retained at buy at Ord Minnett; Price Target: $2.80

Guzman Y Gomez (GYG)

• Retained at outperform at CLSA; Price Target: $31.30 from $31.50

• Retained at neutral at Jarden; Price Target: $25.40 from $25.20

• Retained at underweight at JPMorgan; Price Target: $23.10 from $23.60

IGO (IGO)

• Retained at underweight at Morgan Stanley; Price Target: $4.60

Iluka Resources (ILU)

• Retained at overweight at Morgan Stanley; Price Target: $8.60

Judo Capital Holdings (JDO)

• Retained at buy at Citi; Price Target: $2.00

L1 Group (L1G)

• Retained at hold at Bell Potter; Price Target: $0.90 from $0.70

Lynas Rare Earths (LYC)

• Retained at equal-weight at Morgan Stanley; Price Target: $19.45

• Retained at sell at Ord Minnett; Price Target: $10.00

Mineral Resources (MIN)

• Retained at overweight at Morgan Stanley; Price Target: $49.00

Medical Developments International (MVP)

• Retained at speculative buy at Bell Potter; Price Target: $0.85 from $0.80

Netwealth Group (NWL)

• Upgraded to buy from neutral at Citi; Price Target: $35.00 from $35.50

Oceania Healthcare (OCA)

• Retained at outperform at Macquarie; Price Target: $0.99

Paladin Energy (PDN)

• Retained at overweight at Morgan Stanley; Price Target: $9.50

Pilbara Minerals (PLS)

• Retained at overweight at Morgan Stanley; Price Target: $2.85

Pro Medicus (PME)

• Upgraded to hold from trim at Morgans; Price Target: $290.00 from $285.00

Pepper Money (PPM)

• Retained at buy at Citi; Price Target: $2.40

QPM Energy (QPM)

• Retained at speculative buy at Bell Potter; Price Target: $0.09

Qube Holdings (QUB)

• Upgraded to overweight from equal-weight at Morgan Stanley; Price Target: $4.50 from $4.40

Rio Tinto (RIO)

• Retained at equal-weight at Morgan Stanley; Price Target: $129.50

Regis Resources (RRL)

• Retained at sell at Citi; Price Target: $5.00 from $4.80

South32 (S32)

• Retained at overweight at Morgan Stanley; Price Target: $3.25

Sandfire Resources (SFR)

• Retained at underweight at Morgan Stanley; Price Target: $11.45

• Downgraded to sell from neutral at UBS; Price Target: $14.50 from $13.10

Sheffield Resources (SFX)

• Retained at hold at Ord Minnett; Price Target: $0.13 from $0.20

Stockland (SGP)

• Retained at overweight at Morgan Stanley; Price Target: $6.90

Whitehaven Coal (WHC)

• Retained at overweight at Morgan Stanley; Price Target: $8.00

Scans