Evening Wrap: ASX 200 soars on global risk-on, lack of big stick from RBA, uranium stocks rip again

Sell in May and go away?

Historically, this hasn't been a crazy thing for investors to do. Today's stonking gain could be the start of the rally that presents you with the big opportunity to do just that – so you might want to pay extra special attention from here.

The RBA spared the rod (and spoiled us children), and Uranium stocks had a ripper day...again!

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 110.9 points higher at 7,793.3, smack-bang on its session high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by an impressive 238 to 41.

You guessed it, with a candle like the one you’ll see in ChartWatch below, all 11 of the major ASX sectors were up today. There’s still an interest rate sensitive skew to the winners, with the Utilities (XUJ) (+2.8%) and Consumer Discretionary (XDJ) (+1.9%) sectors taking out the top two positions on the sector performance table.

To be fair, Utilities is basically just two stocks in terms of market cap, and one of those, AGL Energy (ASX: AGL) popped over 7% today on the back of improved FY24 profit guidance.

Also doing well today was the Gold (XGD) (+1.9%) sub-index. It bounced back due to a firming of the gold price overnight. But, there's possibly also an element of generally positive broker ratings and price target changes post gold companies' recent quarterly results, as well as generally positive sentiment towards gold in general. For example, I came across a Citi report today which tipped "$3,000/oz gold over the next 12-15m".

Gold stocks shone brightly today, extending their gains from yesterday

The worst couple of sectors were still up over 1% – so nobody really did it that tough today. Still, it wasn’t a surprise to see one of the worst performing sectors of the last couple of weeks, Consumer Staples (XSJ) (+1.0%), at the bottom of the sector performance table.

Special mentions? Uranium stocks had another good day today, but you either already knew this because you're all over them, or you don't have any exposure and you'd rather I not say it again (for about the hundredth day in a row)!

Do you really want to know?

ChartWatch

S&P/ASX 200 (XJO)

Tuesday's candle indicates a strong demand-side showing

Big white candle. What does it mean? 🤔

1. Motivated buyers – "Let me in, I don't care what I pay...just let me in!"

2. Reluctant sellers – "Oh, you want my shares? Well, I couldn't possibly let you have them for that much. Oh, that much, well, (sighs), ok then". (Seconds later: "Darn I should have waited for more...I better not sell any more / I want to get back in!")

Big white candle on low volume. What does it mean? 🤔

1. Motivated demand (i.e., bidding up prices) was chasing very few shares for sale.

2. Sellers are likely holding out for more.

Close at the high. What does it mean? 🤔

1. (Buyers:) At the end of the day, prices are much higher than yesterday, but I don't care – let me in!

2. (Sellers:) At the end of the day, prices are much higher than yesterday, but I don't care – I still won't sell!

Economics 101 suggests that when the price of something goes up there should be more supply of that something. What does a big white candle which closes on the high of the session tell you about this concept? Prices went up, yet there was just as little supply.

Nobody knows what's going to happen tomorrow – the future is unwritten. But we can infer from the price action what is more likely to occur all things being equal (i.e., assuming the demand-supply environment isn't impacted by new information).

Given this, I have a question for you! What does today's candle infer about tomorrow's likely direction in Aussie share prices?

Always remember: Good technical analysis is simply the study of demand and supply. How they interact, how they change, and they manifest themselves in price. Never complicate it more than this! (Oh, and can I say: All hail the long term uptrend ribbon! 💪)

Economy

Today

• AUS RBA Cash Rate, Monetary Policy Statement, Monetary Policy Statement

  • No change to official cash rate of 4.35%

  • Key omissions in May statement versus March statement:

    • March: Recent information suggests inflation continues to moderate, ***in line with the RBA’s latest forecasts***

    • Now: ***but is declining more slowly than expected***

    • Leaves out: While there are encouraging signs that inflation is moderating

    • March: While recent data indicate inflation is easing, it remains high.

    • Now: While inflation is easing, ***it is doing so more slowly than previously expected*** and it remains high.

  • Reserve Bank Governor Michelle Bullock said in response to our own Ally Selby's question: "I think we've always felt that it was a bit too soon to declare victory, and I think that the numbers in recent weeks have demonstrated that for us. We think policy is restrictive, we don't think we necessarily think we have to tighten again, but we can't rule it out. If we have to, we will."

For full coverage of the RBA's decision and post-meeting press conference, check out this article.

Later this week

Friday

• 03:00 USA 30 year bond auction

Saturday

• USA Preliminary University of Michigan Consumer Sentiment

  • Expected -0.9% to 76.3% vs -0.9% to 77.2% in April

Latest News

Interesting Movers

Trading higher

• +12.1% Sayona Mining (SYA) - Lithium carbonate prices were up again today in China, still, a big jump on decent volume without any news 🤔

• +8.5% Latin Resources (LRS) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +8.4% Paladin Energy (PDN) - No news, Aussie U-stocks keep ripping! Rise is consistent with prevailing short and long term uptrends 🔎📈

• +8.0% Lotus Resources (LOT) - No news, Aussie U-stocks keep ripping! Rise is consistent with prevailing short and long term uptrends 🔎📈

• +7.4% AGL Energy (AGL) - Updated FY24 Guidance, rise is consistent with prevailing short term uptrend, long term uptrend is transitioning from down to up, bounced off long term trend ribbon 🔎📈

• +6.9% OOH!Media (OML) - No news, continues to bounce off long term uptrend ribbon 🔎📈

• +6.9% The Star Entertainment Group (SGR) - No news 🤔

• +6.8% HMC Capital (HMC) - Macquarie Conference Presentation, continues to bounce off long term uptrend ribbon 🔎📈

• +6.7% Cettire (CTT) - No news 🤔

• +6.5% Lycopodium (LYL) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +6.1% WA1 Resources (WA1) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

Trading lower

• -11.9% Omni Bridgeway (OBL) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -6.4% Sims (SGM) - Trading Update, fall is consistent with prevailing short and long term downtrends 🔎📉

• -5.8% Lindsay Australia (LAU) - Trading Update FY2024, fall is consistent with prevailing short term downtrend, long term is transitioning from up to down 🔎📉

• -4.3% Imdex (IMD) - Macquarie Australia Conference Presentation 2024

• -3.4% Bapcor (BAP) - Downgraded to hold from buy at Jefferies and price target cut to $5.30 from $7.15, fall is consistent with prevailing short and long term downtrends 🔎📉

• -3.4% Southern Cross Electrical Engineering (SXE) - Pullback from yesterday's massive gain following Profit guidance announcement

• -3.1% Graincorp Class A (GNC) - Downgraded to hold from buy at Jefferies and price target cut to $9.20 from $9.30

Broker Notes

• Bapcor (BAP)

  • Downgraded to hold from buy at Jefferies; Price Target: $5.30 from $7.15

• Chrysos Corporation (C79)

  • Retained at buy at Shaw and Partners; Price Target: $7.50

• Comet Ridge (COI)

  • Downgraded to hold from buy at Canaccord Genuity; Price Target: $0.21

• Cyclopharm (CYC)

  • Retained at buy at Bell Potter; Price Target: $3.40 from $3.80

• Endeavour Group (EDV)

  • Retained at buy at Goldman Sachs; Price Target: $6.30 from $6.20

  • Retained at overweight at Jarden; Price Target: $6.30 from $6.40

  • Retained at overweight at JP Morgan; Price Target: $6.00

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

  • Retained at hold at Morgans; Price Target: $5.20

  • Retained at buy at UBS; Price Target: $6.00

• Elders (ELD)

  • Retained at buy at Citi; Price Target: $8.50

• Goodman Group (GMG)

  • Retained at buy at Citi; Price Target: $32.50

• Graincorp Class A (GNC)

  • Retained at buy at Bell Potter; Price Target: $9.20 from $9.30

  • Downgraded to hold from buy at Jefferies; Price Target: $9.10 from $9.65

• Liontown Resources (LTR)

  • Initiated at buy at Argonaut Securities; Price Target: $1.60

  • Retained at buy at Bell Potter; Price Target: $1.85

• Megaport (MP1)

  • Retained at buy at Citi; Price Target: $16.05 from $16.80

• Macquarie Group (MQG)

  • Retained at sell at Citi; Price Target: $176.00 from $161.00

• Propel Funeral Partners (PFP)

  • Retained at overweight at Morgan Stanley; Price Target: $6.30

• Pilbara Minerals (PLS)

  • Initiated at buy at Argonaut Securities; Price Target: $5.10

• QBE Insurance Group (QBE)

  • Retained at buy at Citi; Price Target: $19.50 from $18.00

• Regis Resources (RRL)

  • Retained at sell at Citi; Price Target: $1.70 from $1.30

  • Retained at overweight at Morgan Stanley; Price Target: $2.45

• Smart Parking (SPZ)

  • Retained at buy at Shaw and Partners; Price Target: $0.70

• Strike Energy (STX)

  • Initiated at sector perform at RBC Capital Markets; Price Target: $0.22

• Southern Cross Electrical Engineering (SXE)

  • Retained at buy at Shaw and Partners; Price Target: $1.70 from $1.50

• Transurban Group (TCL)

  • Retained at buy at Citi; Price Target: $15.50

  • Retained at neutral at Goldman Sachs; Price Target: $13.10

  • Retained at equal-weight at Morgan Stanley; Price Target: $13.06 from $13.68

• Westpac Banking Corporation (WBC)

  • Retained at overweight at Barrenjoey; Price Target: $27.00 from $26.00

  • Retained at sell at Citi; Price Target: $22.25

  • Retained at neutral at Goldman Sachs; Price Target: $24.10 from $23.71

  • Retained at underperform at Jefferies; Price Target: $20.00 from $18.50

  • Retained at neutral at JP Morgan; Price Target: $25.00 from $24.30

  • Retained at underweight at Morgan Stanley; Price Target: $24.40 from $23.00

Scans