Evening Wrap: ASX 200 slumps on bearish US lead, high flyers copper and uranium pull back, tech sags again

It was another tough day at the office for Aussie investors. But let me put this out there, I bet it wasn't as bad as you expected given the lead we had from Wall St, right?

Yesterday I referred to investors in gold, copper, and uranium stocks as "lucky". Today, that list was narrowed to just gold, if you get what I mean.

Unlucky areas of the market, like lithium and iron ore, continued to be unlucky, as was pretty much everything else. On that cheery note, for the last time this week...

Let’s dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 44.0 points lower at 7,773.3, 0.41% from its session low and 0.57% from its high. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by a dismal 70 to 205.

For the week, the XJO finished down 123.6 points or 1.59% lower.

It’s becoming a bit of a trend lately. The best performing sectors today were Gold (XGD) (+0.13%), Energy (XEJ) (-0.02%), and Utilities (XUJ) (-0.12%). When I say best performing, only Gold was up, while the other two were just down less than the rest.

As for the rest, there's also a nasty trend developing here, too. Information Technology (XIJ) (-1.4%) was the hardest hit again following on from sharp falls in the tech-heavy Nasdaq Index (see ChartWatch), and serial underperformer Materials (XMJ) (-0.80%) was a habitual second worst.

In Materials, most of the big falls were concentrated in high flying copper and uranium stocks which had their collective wings clipped. On the other hand, low flyers lithium and iron ore stocks, well, you know the drill... The table below summarises the carnage in the sector.

The buck stopped here...today...on copper and uranium stocks. Lithium was just lithium

The bearish lead from Wall St was part tantrum over comments by a Federal Reserve official who hinted there may not be any interest rate cuts this year if the inflation picture didn't warrant it (duh!), but also part due to investors scrambling to the sidelines prior to a major employment report due in New York due tonight (see Economy).

ChartWatch

S&P/ASX 200 (XJO)

ST uptrend ribbon is providing dynamic support for now...

I think it's relevant to round out the week with a quick check-up on on the local benchmark. Today's black candle isn't fantastic, but it's far from a disaster either.

Firstly, I note the downward pointing shadow which indicates there was some tentative but optimistic excess demand towards the end of the session. This is no mean feat considering it's Friday, as well as the severity of declines on Wall St (see below), and also the event risk attached to this evening's release of March Non-Farm Payroll data in the US.

Also consider the short term uptrend ribbon did exactly what it's supposed to do, that is, it offered dynamic support. Despite the nervousness during the week, trends and price action remain intact and continue to indicate demand-side control.

For now.

Next week, watch out for any of these factors to signal the supply-side has taken control:

1. A close below the short term uptrend ribbon

2. An increase in the frequency of supply-side candles (i.e., those with black bodies and or upward pointing shadows)

3. A confirmation of the 7911 peak as a major point of supply with the setting of falling peaks and falling troughs

Assuming the glass is half full and not empty. White candles in the short term trend ribbon will confirm a strengthening of demand-side control, and a close above 7911 would signal the bull market is strong as a, um, bull?

NASDAQ Composite Index (COMP)

Big black candle = Big trouble

This is where all the fuss is coming from! That was a nasty candle on the NASDAQ last night, and it was reflected in other major US indices like the S&P 500 and the broad-based Russell 2000.

Bad stuff from Thursday's technicals:

1. Big black candle + close on low of session = motivated supply & likely more to come

2. Close below 2-Apr trough = demand removal

3. Close below short term uptrend ribbon = demand-side is losing short term price control

The only saving grace is the lack of volume, it was quite subdued, and this is typically not associated with a major turning point.

Basically, whilst supply was motivated, there wasn't a great deal of it, and it was more likely a case of "a bit" of motivated supply pushing into a demand vacuum.

I suspect the demand side got out of the way yesterday – which is uncharacteristic given their recent history of perpetuating the prevailing trend. I suspect they're hiding from something, most likely the March NFP data due tonight.

The next candle is super important. We want to see a strong demand-side showing after the event risk of NFP is out of the way. So, a big white candle and or a long downward pointing shadow.

The opposite will confirm the changing of the short term trend to down, and a new phase of supply side control. In particular, I wouldn't want to see a close below the 15862 point of demand.

Economy

Today

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

Later this week

Friday

• 23:30 USA March employment data

  • Non-Farm Employment Change (+205K forecast vs 275K previous)

  • Unemployment Rate (3.9% forecast vs 3.9% previous)

  • Average Hourly Earnings m/m (+0.3% forecast vs +0.1% previous)

Latest News

Interesting Movers

Trading higher

• +5.8% Mount Gibson Iron (MGX) - On Track for FY24 Shipping Guidance

• +4.5% Cooper Energy (COE) - Continued positive response to Wednesday's Market Update, rise is consistent with prevailing short-term trend, long-term trend is transitioning from down to up 🔎📈

• +4.1% GQG Partners (GQG) - FUM as at 31 March 2024, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +3.8% Immutep (IMM) - No news, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +3.4% Chalice Mining (CHN) - No news, 2 up days in a row in a mediocre market 🤔

• +3.4% Ora Banda Mining (OBM) - Riverina and Sand King Update, retained at buy at Euroz Hartleys and price target increased to $0.40 from $0.35, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +3.3% Regis Resources (RRL) - No news, looks like it's trying to hold above/bounce off the long-term uptrend ribbon 🔎📈

• +2.8% Emeco Holdings (EHL) - No news, rise is consistent with prevailing short-term trend, long-term trend is transitioning from down to up 🔎📈

• +2.8% RPMGlobal Holdings (RUL) - No news, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +2.5% Service Stream (SSM) - No news, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +2.4% Evolution Mining (EVN) - No news, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +2.3% Elders (ELD) - No news, upgraded to outperform from neutral at Macquarie and price target increased to $10.45 from $7.12, retained at buy at Shaw and Partners, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +2.3% Macmahon Holdings (MAH) - No news, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +2.2% Resolute Mining (RSG) - No news, rise is consistent with prevailing short and long-term uptrends 🔎📈

• +2.2% AMP (AMP) - No news, rise is consistent with prevailing short-term trend, long-term trend is transitioning from down to up 🔎📈

• +2.1% Emerald Resources (EMR) - No news, rise is consistent with prevailing short and long-term uptrends 🔎📈

Trading lower

• -7.4% Champion Iron (CIA) - No news, retained at buy at Citi, but broker cut price target to $8.60 from $9.60, fall is consistent with prevailing short-term downtrend, long-term trend is transitioning from up to down, closed below long-term uptrend ribbon which appears now confirmed as offering dynamic supply 🔎📉

• -7.1% Kingsgate Consolidated (KCN) - No news, gave up most of yesterday's gains 🤔

• -6.9% Westgold Resources (WGX) - Continued negative response to Wednesday's Q3, FY24 Production Update, closed below short-term uptrend ribbon 🔎📉

• -6.6% Vulcan Energy Resources (VUL) - No news, fall is consistent with prevailing long-term downtrend, closed below short-term uptrend ribbon, price action is falling peaks and falling troughs, candles predominantly supply side 🔎📉

• -5.7% 29METALS (29M) - Copper stocks broadly lower today, pullback from recent strength

• -5.5% Capricorn Metals (CMM) - March 2024 Quarterly Production Update

• -5.2% Pexa Group (PXA) - No news 🤔

• -5.0% Arcadium Lithium (LTM) - Followed its NYSE counterpart's move on Thursday, rest of US lithium sector also lower, fall is consistent with prevailing short and long-term downtrends 🔎📉

• -4.9% Nexgen Energy (NXG) - Uranium stocks broadly lower today, pullback from recent strength

• -4.6% Develop Global (DVP) - Lithium stocks broadly lower today on weakness in US lithium stocks on Thursday, copper also broadly weaker, fall is consistent with prevailing short and long-term downtrends 🔎📉

• -4.1% Paladin Energy (PDN) - Uranium stocks broadly lower today, pullback from recent strength

Broker Notes

• AIC Mines (A1M) retained at buy at Shaw and Partners; Price Target: $0.80

• Ampol (ALD) upgraded to overweight from neutral at JP Morgan; Price Target: $44.00 from $37.85

• Bowen Coking Coal (BCB) retained at buy at Shaw and Partners; Price Target: $0.23

• Beach Energy (BPT) downgraded to neutral from overweight at JP Morgan; Price Target: $1.95 from $1.85

• Cobram Estate Olives (CBO) retained at buy at Shaw and Partners; Price Target: $1.75

• Champion Iron (CIA) retained at buy at Citi; Price Target: $8.60 from $9.60

• Cooper Energy (COE) downgraded to neutral from overweight at JP Morgan; Price Target: $0.17 from $0.16

• EBR Systems (EBR) retained at buy at Bell Potter; Price Target: $1.43 from $1.30

• Endeavour Group (EDV) initiated at neutral at Citi; Price Target: $5.94

• Elders (ELD)

  • Upgraded to outperform from neutral at Macquarie; Price Target: $10.45 from $7.12

  • Retained at buy at Shaw and Partners; Price Target: $9.00

• Immutep (IMM) retained at buy at Bell Potter; Price Target: $0.65

• Lindsay Australia (LAU) retained at buy at Shaw and Partners; Price Target: $1.60

• Ora Banda Mining (OBM) retained at buy at Euroz Hartleys; Price Target: $0.40 from $0.35

• OOH!Media (OML) initiated at buy at UBS; Price Target: $2.05

• Playside Studios (PLY) retained at buy at Shaw and Partners; Price Target: $0.80

• Pro Medicus (PME) upgraded to positive from neutral at E&P; Price Target: $152.68 from $94.09

• Block (SQ2) downgraded to underweight from equal-weight at Morgan Stanley; Price Target: $60.00 from $62.00

• Suncorp Group (SUN)

  • Retained at neutral at Citi; Price Target: $16.60

  • Retained at buy at UBS; Price Target: $16.80

• The Lottery Corporation (TLC) retained at neutral at Citi; Price Target: $5.50

Scans