Technical analysis for beginners: ChartWatch Primer
Wed 18 Sep 24, 9:30am (AEST)
Home
/
News
Market Wraps
/Evening Wrap: ASX 200 snags another record on stronger utilities, energy and financials, lithium and iron ore struggle again
News
Market Wraps
/Evening Wrap: ASX 200 snags another record on stronger utilities, energy and financials, lithium and iron ore struggle again
Market Wraps
Evening Wrap: ASX 200 snags another record on stronger utilities, energy and financials, lithium and iron ore struggle again
Wed 18 Sep 24, 5:35pm (AEDT)
Stocks in article
The S&P/ASX 200 closed 1.2 points higher, up 0.02%.
Another record high intraday peak, and another record high close. But also, another day of quiet introspection for Aussie investors as many left Dodge before sundown (or at least before the big FOMC meeting due at 4pm Sydney time tomorrow morning!).
It was largely stock-specific today, rather than thematic/sector specific, and we have the usual reporting of all the major stock-specific moves, and the broker responses to them, in this evening's Wrap.
You'll also find detailed technical analysis on the ASX Property (XPJ) and Resources (XJR) sectors in today's ChartWatch.
Let's dive in!
Today in Review
Wed 18 Sep 24, 5:08pm (AEST)
Enjoying the Evening Wrap? Sign up to get it sent directly to your inbox after every trading day.
Markets
ASX 200 Session Chart
The S&P/ASX 200 (XJO) finished 1.2 points higher at 8,142.1, 0.35% from its session low and just 0.14% from its high. As if confirming the lack of impetus to do much of anything today, in the broader-based S&P/ASX 300 (XKO), advancers vs decliners was nearly even at 133 to 135.
Utilities (XUJ) (+1.3%) was the best performing sector today, almost solely due to a tidy 2.2% gain in sector heavyweight Origin Energy (ASX: ORG). The stock enjoyed a rating upgrade from Macquarie to “Outperform” from “Neutral”. Macquarie noted that falling thermal coal prices would likely bolster Origin’s bottom line. The broker also increased its price target for the stock to $10.43 from $10.12.
Also doing well today was the Energy (XEJ) (+0.69%) sector, it rallied on stronger energy commodity prices Tuesday (ironically thermal coal prices notched higher!). This meant New Hope Corporation (ASX: NHC) added 4.6%, but there is also likely a degree of shifting fund manager deck chairs here after yesterday’s Presentation on Full Year 2024 Results.
Financials (XFJ) (+0.36%) were also good (they’ve been good for a long time now) as Morgan Stanley conceded defeat (it was not better than an “Equal-weight” on any of the banks prior to today – despite the sector's massive gains over the last 12 months) as it upgraded its ratings on National Australia Bank (ASX: NAB) (+1.4%) and Westpac Banking Corporation (ASX: WBC) (+0.4%).
NAB is up to “Overweight” from “Equal-weight” and its price target is moved to $38 from $34.20, while WBC is now “Equal-weight” from “Underweight” and its price target is moved to $29.70 from $26.50. Morgan Stanley also bumped up price targets on several other ASX banks, and you’ll find the full details on the broker's moves in the Broker Notes section below.
Company | Last Price | Change $ | Change % | 1mo % | 1yr % |
EVT (EVT) | $11.06 | +$0.53 | +5.0% | -1.5% | -3.0% |
New Hope Corporation (NHC) | $4.52 | +$0.2 | +4.6% | -7.6% | -26.3% |
Ora Banda Mining (OBM) | $0.600 | +$0.025 | +4.3% | +18.8% | +545.2% |
Nick Scali (NCK) | $16.03 | +$0.6 | +3.9% | +6.3% | +34.5% |
Karoon Energy (KAR) | $1.530 | +$0.055 | +3.7% | -14.8% | -38.7% |
Accent Group (AX1) | $2.34 | +$0.07 | +3.1% | +4.0% | +21.6% |
Corporate Travel Management (CTD) | $11.87 | +$0.33 | +2.9% | -5.1% | -32.5% |
Iperionx (IPX) | $2.69 | +$0.07 | +2.7% | +22.8% | +92.1% |
Block (SQ2) | $100.00 | +$2.52 | +2.6% | +0.4% | +18.9% |
Eagers Automotive (APE) | $10.39 | +$0.26 | +2.6% | -1.9% | -27.3% |
Bapcor (BAP) | $5.04 | +$0.12 | +2.4% | +2.2% | -28.5% |
Deep Yellow (DYL) | $1.155 | +$0.025 | +2.2% | +10.5% | +19.1% |
Lovisa (LOV) | $32.42 | +$0.7 | +2.2% | -11.4% | +62.9% |
Origin Energy (ORG) | $9.76 | +$0.21 | +2.2% | -3.1% | +13.0% |
West African Resources (WAF) | $1.570 | +$0.03 | +1.9% | +7.2% | +96.3% |
Kogan.Com (KGN) | $4.91 | +$0.09 | +1.9% | +12.9% | -6.5% |
News Corporation (NWS) | $41.20 | +$0.7 | +1.7% | -4.4% | +25.1% |
PWR Holdings (PWH) | $9.10 | +$0.15 | +1.7% | -3.2% | -18.2% |
TPG Telecom (TPG) | $4.91 | +$0.08 | +1.7% | +7.9% | -13.1% |
Insignia Financial (IFL) | $2.48 | +$0.04 | +1.6% | -13.9% | -1.6% |
The best performing stocks from the best performing ASX sectors today
There were a couple of sectors that you could say “did it tough today”, Health Care (XHJ) (-0.43%) which is finding itself in this list a little too often for my liking lately, and serial underperformer Materials (XMJ) (-0.54%). In Materials, lithium and iron ore stocks had another bad day due to falling futures prices of their respective commodities in Asian trade today.
Company | Last Price | Change $ | Change % | 1mo % | 1yr % |
Lotus Resources (LOT) | $0.230 | -$0.01 | -4.2% | -4.2% | -9.8% |
St Barbara (SBM) | $0.275 | -$0.01 | -3.5% | +14.6% | +44.7% |
Resolute Mining (RSG) | $0.705 | -$0.015 | -2.1% | +4.4% | +93.2% |
Mineral Resources (MIN) | $37.09 | -$0.75 | -2.0% | -15.2% | -47.8% |
IGO (IGO) | $5.08 | -$0.1 | -1.9% | +1.0% | -61.8% |
WA1 Resources (WA1) | $14.38 | -$0.27 | -1.8% | -5.0% | +173.4% |
Red 5 (RED) | $0.325 | -$0.005 | -1.5% | -11.0% | +47.7% |
Pilbara Minerals (PLS) | $2.82 | -$0.03 | -1.1% | -0.7% | -37.2% |
Sims (SGM) | $11.03 | -$0.11 | -1.0% | +0.1% | -20.9% |
South32 (S32) | $3.20 | -$0.03 | -0.9% | +6.3% | -4.8% |
Rio Tinto (RIO) | $109.74 | -$1.01 | -0.9% | -0.7% | -7.7% |
BHP Group (BHP) | $39.19 | -$0.36 | -0.9% | -2.6% | -14.2% |
Capricorn Metals (CMM) | $6.19 | -$0.05 | -0.8% | +4.7% | +40.4% |
Nufarm (NUF) | $3.81 | -$0.03 | -0.8% | -3.5% | -22.2% |
Perseus Mining (PRU) | $2.55 | -$0.02 | -0.8% | -1.2% | +40.9% |
Emerald Resources (EMR) | $3.84 | -$0.03 | -0.8% | -3.8% | +55.5% |
Stanmore Resources (SMR) | $2.64 | -$0.02 | -0.8% | -17.0% | -17.5% |
Westgold Resources (WGX) | $2.65 | -$0.02 | -0.7% | -11.7% | +47.6% |
Sandfire Resources (SFR) | $8.73 | -$0.06 | -0.7% | -0.6% | +33.1% |
Nickel Industries (NIC) | $0.825 | -$0.005 | -0.6% | 0% | +1.2% |
A tough day for lithium and iron ore stocks…again!
ChartWatch
Real Estate Investment Trusts Sector Index (XPJ)
An interesting chart
Looking through my usual list of macro charts, there’s not a great deal going on based on that last candle as the world hits the “Pause” button ahead of tonight’s massive risk event.
So, perhaps we can do a little navel gazing in this evening’s ChartWatch and check out two super interesting ASX sector charts – one that is a picture of excess demand, and one that is a picture of excess supply.
No prizes for guessing which one this is! The Real Estate Investment Trusts (XPJ) sector is on a tear. We’ve talked about it most evenings for the last few weeks when we discuss the best sector performers – usually with some explanation of how property is a "long duration asset class", and how "market yields are falling" (I’ll usually throw in a chart of the US 2-Year T-Bond Yield), and how "blah blah blah blah!"
Sorry, I nearly forgot this section is called ChartWatch = No fundamentals allowed! 🚫
*Demand*
*Is substantially greater than Supply*
*Equals price going UP⬆️*
At the end of the day, one can come up with a million reasons for why this might be the case – but none of them will change the fact that it is the case.
The key now, is to identify if there are any warning signs whether this trend is in trouble and/or to understand this trend’s sustainability.
It's all good here as far as I am concerned:
✅ Predominance of demand-side candles
✅ Rising points of demand and rising points of supply
✅ ST uptrend
✅ LT uptrend
✅ Dynamic demand is being respected
So for me, I can’t see any reason not to continue to back this trend. The future is unknown, of course, and any of the opposite of the above may begin to occur tomorrow (and I’ll deal with them then!):
⏹️ Predominance of supply-side candles
⏹️ Falling points of demand and falling points of supply
⏹️ ST downtrend
⏹️ LT downtrend
⏹️ Dynamic supply is being respected
These checklists are from my new ChartWatch Primer which I think is a pretty neat little piece of work designed to help you get a better understanding of technical analysis in general, but more importantly, the inner workings of my technical model. The Primer is compulsory reading if you wish to follow along here, or in my daily ChartWatch Scans.
Resources Sector Index (XJR)
An interesting chart
Now for the picture of excess supply. Nearly just as regularly as we might say the XPJ has had a good day, we're probably also saying this one, the Resources (XJR) sector, has had a bad day.
This is because the reason market yields are falling (and thus benefiting the XPJ) is the same reason driving the XJR lower – i.e., fears of a global economic growth slowdown.
Ladies and gentlemen – this is the essence of my technical model. Don’t get too stuck up on the why, rather, just follow the what is happening. Try to be long great uptrends and avoid or short great downtrends.
Imagine if you could have been long the XPJ and short the XJR for the last 3 months? Well, there wasn’t a great deal stopping you.
Anyways, the big issue I have on this chart is the unerring ability of the short term trend ribbon to kill promising rallies in their tracks. Note one in early July, then there was a brief touch at the start of August, and then another tickle at the end of August. Kiss. Kill.
We’re smack bang in the zone again. As always, the future is unknown…etc. but today’s candle with its upward pointing shadow did show the telltale sign of excess supply resuming its work…
How will we know when it’s safe to dip a toe back in the proverbial waters here? For me, I’d at least have to see a solid higher trough, and preferably it occurs on some very strong (as in really strong) demand-side candles (i.e., white-bodied and or downward pointing shadows).
Economy
Today
There weren't any major data releases in our time zone today (+0% actual vs +% forecast vs +% previous)
Later this week
Wednesday
22:30 USA Building Permits & Housing Starts August (1.41 million & 131 million forecast 1.40 million & 1.24 million in July)
Thursday
04:00 USA FOMC Meeting & Statement
Federal Funds Rate (+5.25% forecast vs +5.50% previous = first 0.25% cut in cycle!)
04:30 USA FOMC Press Conference
11:30 AUS Employment Change August (+25,800 vs +58,200 July)
21:00 UK Bank of England (BOE) Official Bank Rate (no change at 5.0% forecast)
Friday
11:00 CHN Peoples Bank of China (PBOC) 1 & 5-year Loan Prime Rate (no change at 3.35% and 3.85% forecast)
TBA Bank of Japan (BOJ) Policy Rate (no change at 0.25% forecast)
Latest News
Interesting Movers
Trading higher
+14.6% Chalice Mining (CHN) - Continued positive response to yesterday's Gonneville Approved as Strategic Project by WA Government
+7.9% Select Harvests (SHV) - No news, upgraded to buy from hold at Bell Potter and price target increase to $4.95 from $4.40
+6.3% Imugene (IMU) - Imugene Receives Orphan Drug Designation for VAXINIA
+5.3% Core Lithium (CXO) - Positive Gold and Lithium Results at Shoobridge
+5.0% EVT (EVT) - No news
+4.8% Austal (ASB) - Continued positive response to 16 Sep Austal awarded US$450 million contract to expand US shipyard
+4.8% Opthea (OPT) - No news, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up 🔎📈
+4.6% New Hope Corporation (NHC) - Presentation on Full Year 2024 Results and Bridgeport Energy 2024 Reserves and Resources Statement and Becoming a substantial holder
+4.3% Ora Banda Mining (OBM) - 2024 Annual General Meeting - Key Dates, generally stronger ASX gold sector today
+4.0% Appen (APX) - No news, consistent with recent volatility, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up 🔎📈
+3.9% Nick Scali (NCK) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈
Trading lower
-4.9% Botanix Pharmaceuticals (BOT) - No news since 16 Sep Botanix Webinar - Presentation
-4.2% Lotus Resources (LOT) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉
-3.5% Telix Pharmaceuticals (TLX) - No news, fall is consistent with prevailing short term downtrend 🔎📉
-3.2% HMC Capital (HMC) - No news
-3.1% Dalrymple Bay Infrastructure/Notes (DBI) - No news
-3.0% Resmed Inc (RMD) - No news
Broker Notes
Auckland International Airport (AIG)
Retained at outperform at Macquarie; Price Target: $8.00
Aristocrat Leisure (ALL)
Retained at buy at Citi; Price Target: $59.00
AMP (AMP)
Retained at buy at Citi; Price Target: $1.45
ANZ Group (ANZ)
Retained at underweight at Morgan Stanley; Price Target: $27.50
Austal (ASB)
Retained at buy at Bell Potter; Price Target: $3.15 from $2.75
Retained at buy at Citi; Price Target: $4.14
ASX (ASX)
Retained at neutral at Citi; Price Target: $62.30
Retained at equal-weight at Morgan Stanley; Price Target: $58.00
Antipa Minerals (AZY)
Retained at buy at Shaw and Partners; Price Target: $0.04
Bendigo and Adelaide Bank (BEN)
Retained at equal-weight at Morgan Stanley; Price Target: $12.00 from $11.90
Beach Energy (BPT)
Retained at buy at UBS; Price Target: $1.60
Commonwealth Bank of Australia (CBA)
Retained at underweight at Morgan Stanley; Price Target: $113.50 from $103.00
Challenger (CGF)
Retained at buy at Citi; Price Target: $8.30
Computershare (CPU)
Retained at buy at Citi; Price Target: $30.00
CSL (CSL)
Retained at accumulate at Ord Minnett; Price Target: $319.00
Insurance Australia Group (IAG)
Retained at buy at Citi; Price Target: $8.20
Retained at neutral at Goldman Sachs; Price Target: $7.20
Insignia Financial (IFL)
Retained at neutral at Citi; Price Target: $2.70
Imdex (IMD)
Retained at sell at Citi; Price Target: $2.00
Incitec Pivot (IPL)
Retained at buy at Goldman Sachs; Price Target: $3.35
Retained at hold at Jefferies; Price Target: $3.00
Retained at equal-weight at Morgan Stanley; Price Target: $3.00
Retained at buy at UBS; Price Target: $3.40
Megaport (MP1)
Retained at outperform at Macquarie; Price Target: $10.70 from $13.60
Medibank Private (MPL)
Retained at neutral at Citi; Price Target: $3.90
National Australia Bank (NAB)
Upgraded to overweight from equal-weight at Morgan Stanley; Price Target: $38.00 from $34.20
Nick Scali (NCK)
Retained at buy at Citi; Price Target: $16.53
Newmont Corporation (NEM)
Retained at buy at UBS; Price Target: $100.00 from $75.00
New Hope Corporation (NHC)
Retained at hold at Bell Potter; Price Target: $4.60 from $4.70
Retained at neutral at Macquarie; Price Target: $4.20 from $4.30
Upgraded to add from hold at Morgans; Price Target: $5.20 from $5.45
NIB (NHF)
Retained at neutral at Citi; Price Target: $6.55
Origin Energy (ORG)
Upgraded to outperform from neutral at Macquarie; Price Target: $10.43 from $10.12
Perpetual (PPT)
Retained at neutral at Citi; Price Target: $21.40
Platinum Asset Management (PTM)
Retained at buy at Bell Potter; Price Target: $1.10
Upgraded to neutral from underweight at JP Morgan; Price Target: $1.05 from $0.90
QBE Insurance Group (QBE)
Retained at buy at Citi; Price Target: $19.30
Ramsay Health Care (RHC)
Retained at hold at Ord Minnett; Price Target: $42.40 from $43.40
Steadfast Group (SDF)
Retained at outperform at Macquarie; Price Target: $6.80
Siteminder (SDR)
Retained at buy at Citi; Price Target: $6.60
Select Harvests (SHV)
Upgraded to buy from hold at Bell Potter; Price Target: $4.95 from $4.40
Suncorp Group (SUN)
Retained at neutral at Citi; Price Target: $17.70
Retained at buy at Goldman Sachs; Price Target: $187.50
Retained at neutral at Macquarie; Price Target: $17.00
Treasury Wine Estates (TWE)
Retained at neutral at Citi; Price Target: $12.97
Westpac Banking Corporation (WBC)
Upgraded to equal-weight from underweight at Morgan Stanley; Price Target: $29.70 from $26.50
Westgold Resources (WGX)
Retained at buy at Argonaut Securities; Price Target: $4.00
Retained at buy at Canaccord Genuity; Price Target: $3.50 from $3.55
Retained at outperform at Macquarie; Price Target: $3.50 from $3.70
Retained at outperform at RBC Capital Markets; Price Target: $3.20 from $3.30
Scans
Carl has over 30-years investing experience, helping investors navigate several bull and bear markets over this time. He is a well respected markets commentator who specialises in how the global macro impacts Australian and US equities. Carl has a passion for technical analysis and has taught his unique brand of price-action trend following to thousands of Aussie investors.
Get the latest news and insights direct to your inbox
Latest Articles
It’s time to sell ASX bank shares and buy resources says this major broker
Carl Capolingua · Fri 04 Oct 24, 1:22pm (AEDT)
Morgan Stanley: ASX 200 REITs to trend higher over the next 12 months
Kerry Sun · Fri 04 Oct 24, 12:28pm (AEDT)
Get free post-market insights with our Evening Wrap
Create an account to receive our concise, data-driven post-market recap, sent directly to your inbox, every day.
Along with the Evening Wrap, you'll join 100k+ investors who receive our Morning Wrap and Weekend Newsletter.
Subscribe Now Sign Up FreeAlready have an account? Log in
