Evening Wrap: ASX 200 steadies as Japanese stocks rebound, but buying sporadic. Audinate halved on profit warning

We bounced.

A bit.

Hardly anything, really.

Is the glass half full or empty? You'll only find out if...

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 31.0 points higher at 7,680.6, 0.69% from its session low and 0.43% from its high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by 149 to 117.

Reflecting the narrowness of the market breadth today, the split between gaining/losing sectors was 6-5 for. Two of the best sectors today were two of the worst from yesterday, but I suggest gains of +0.99% in Real Estate Investment Trusts (XPJ) and +0.96% in Financials (XFJ) (+0.86%) are mere fractions of what these sectors lost (dumped) yesterday.

Consumer Discretionary (XDJ) (+1.6%) led the pack on the back of solid gains travel and retail stocks. The best of the best below...

The best performing ASX Discretionary, Real Estate, and Financial stocks today

Still, it could have been worse. There was bunch of stuff that fell again today, in particular, Energy (XEJ) saw another 2% wipeout, Gold (XGD) lost another 1.6%, Resources (XJR) another 0.49%, Communication Services (XTJ) another 0.47%, and yesterday’s worst performer Information Technology (XIJ), dipped another 0.46%.

The worst of the worst below...

The worst performing ASX Energy, Resources, Telco, and IT stocks today

ChartWatch

NASDAQ Composite Index

Thank goodness for the long term trend ribbon...

Short term downtrend. Falling peaks and falling troughs. Predominance of supply-side candles.

Kinda the opposite of what we want to see on the Comp.

But! We do have something that resembles a longish white candle, in what in theory should be a zone of dynamic demand (i.e., the long term uptrend ribbon).

I say resembles, because the upward pointing shadow on Monday's candle is far from ideal. It suggests there wasn't quite enough buy-the-dip-stocks-are-now-cheap-enough excess demand to maintain prices all the way at the session's high.

There's still considerable doubt out there (and in the technicals).

What that candle does provide us with, is a fantastic line in the proverbial sand. In this case, a line in the demand-supply environment sand. Clearly, it's where demand kicked in and said enough is enough. It's also where supply got out of the way.

If we close beneath yesterday's low, that is below 15708 – we are in a downward move that is something far more sinister than a regulation bull market correction.

You know the drill. We want rising peaks and rising troughs, predominantly demand-side candles (i.e., those with white bodies and or downward pointing shadows), and to eclipse key points of supply.

In terms of the latter, watch out now for 17032. I expect it will be a wall of supply that will define whether the Comp can get back to those record highs. 17792 is next.

S&P/ASX 200 (XJO)

How high does a dead cat bounce?

Just a super quick note here, because as is disappointingly clear – nothing’s really changed since we covered the XJO yesterday.

But that’s kind of the point.

No bounce of any significance.

Is disturbing.

The only upside is that the long-term uptrend ribbon continues to hold – and I concede it could have been far worse today – we could have experienced a follow through bout of selling that’s all too consistent with big black candles of the ilk we endured yesterday.

So, let’s hope for a decent bounce in US stocks, particularly as per the Nasdaq chart above, and a quick return to demand-side candles and higher peaks and higher troughs here.

Because if we don’t, it suggests the buy the dippers have gone…bye-bye, Dippers! 👋

Economy

Today

• AUS RBA Monetary Policy Cash Rate decision and Statement

• No change as forecast at 4.35%

• Statement changes:

  • Added: "inflation is proving persistent...above target midpoint for 11 consecutive qtrs...fallen very little over past year"

  • Changed: Inflation to return to target range "late in 2025" now "second half of 2025" Added: comments regarding weakness in Chinese economy, commodity prices, recent markets volatility, AUD depreciation

  • Deleted: "Inflation is easing..." prior to retained "Inflation in underlying terms remains too high"

  • You can read the full statement here

Later this week

Wednesday

• TBA CHN Trade Balance July (709 billion forecast vs 704 billion previous in June)

Thursday

• 12:40 RBA Governor Michelle Bullock Speaks

Friday

• 11:30 CHN Consumer Price Index (CPI) July (+0.3% p.a. forecast vs +0.2% p.a. in June)

• 11:30 CHN Producer Price Index (PPI) July (-0.9% p.a. forecast vs +0.2% p.a. in June)

Latest News

Interesting Movers

Trading higher

• +19.1% Appen (APX) - No news, continued positive response from 30 July Q2 FY24 Quarterly Activity Report and Appendix 4C, rise is consistent with prevailing short term uptrend, appears to be trying to break above long term downtrend ribbon 🔎📈

• +11.1% Peninsula Energy (PEN) - No news since yesterday's Company Presentation - August 2024, generally stronger ASX uranium stocks today, not much to go on here - US u-stocks generally lower, and COMEX futures down also Monday…🤔

• +9.7% Botanix Pharmaceuticals (BOT) - No news, today's bounce is consistent with prevailing long term uptrend 🔎📈

• +8.8% Brainchip (BRN) - No news, small gain compared to losses since February peak

• +8.0% Latin Resources (LRS) - No news, again, small win compared to recent losses…

• +7.8% Macmahon (MAH) - Decmil Schemes of Arrangement Become Effective, today's bounce is consistent with prevailing long term uptrend 🔎📈

• +7.4% Bannerman Energy (BMN) - Ditto for PEN / ASX uranium stocks

• +7.2% Clarity Pharmaceuticals (CU6) - No news, today's bounce is consistent with prevailing long term uptrend 🔎📈

• +6.3% Aurelia Metals (AMI) - No news, not the copper price - it was belted Monday on the LME, trying to bounce off long term uptrend ribbon 🔎📈

• +5.1% Ora Banda Mining (OBM) - Company Update - Diggers & Dealers 2024 (Updated), today's bounce is consistent with prevailing long term uptrend 🔎📈

• +4.5% Lotus Resources (LOT) - Ditto for ASX uranium stocks

• +4.4% Southern Cross Electrical Engineering (SXE) - No news, today's bounce is consistent with prevailing long term uptrend 🔎📈

• +4.2% Catapult Group International (CAT) Catapult 2024 AGM - Presentation, today's bounce is consistent with prevailing long term uptrend 🔎📈

• +4.1% Helloworld Travel (HLO) - No news

• +3.9% Adairs (ADH) - No news, bounced off short term uptrend ribbon 🔎📈

• +3.7% Paladin Energy (PDN) - Ditto for ASX uranium stocks

• +3.7% Deep Yellow (DYL) - Ditto for ASX uranium stocks

Trading lower

• -36.3% Audinate Group (AD8) - FY24 Preliminary Unaudited Results & FY25 Outlook, was down as much as 50% at the open! This stock has been run as a Feature Chart in my ChartWatch ASX Scans Downtrends Lists 15 times since 27 May (highest conviction) 🔎📉

• -6.4% Emerald Resources (EMR) - No news, tough day generally for ASX gold stocks as gold price failed to fire despite global markets' turmoil

• -6.0% Develop Global (DVP) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -6.0% Pro Medicus (PME) - No news

• -5.1% Woodside Energy Group (WDS) - Woodside to acquire OCI's Clean Ammonia Project, fall is consistent with prevailing short and long term downtrends (Feature Chart Downtrends list 13 times since 5 June) 🔎📉

• -4.2% Red 5 (RED) - Investor Presentation - Diggers and Dealers, ditto tough day for ASX gold stocks

• -3.9% Bellevue Gold (BGL) - No news since yesterday's 2024 Diggers and Dealers Presentation, ditto tough day for ASX gold stocks

• -3.8% Chalice Mining (CHN) - Presentation - Diggers and Dealers Mining Forum, fall is consistent with prevailing short and long term downtrends 🔎📉

• -3.6% Sayona Mining (SYA) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -3.4% Newmont Corporation (NEM) - No news, ditto tough day for ASX gold stocks

• -3.4% Seek (SEK) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -3.2% Ramsay Health Care (RHC) - No news since yesterday's FY24 Earnings Update, fall is consistent with prevailing short and long term downtrends (Feature Chart Downtrends list 12 times since 5 June) 🔎📉

Broker Notes

Brambles (BXB)

• Retained at buy at UBS; Price Target: $17.40 from $17.30

Centuria Capital Group (CNI)

• Retained at overweight at Morgan Stanley; Price Target: $2.03

Capstone Copper Corp. (CSC)

• Retained at outperform at Macquarie; Price Target: $13.10 from $12.80

Garda Property Group (GDF)

• Retained at add at Morgans; Price Target: $1.59 from $1.65

Goodman Group (GMG)

• Retained at buy at Citi; Price Target: $40.00

Gold Road Resources (GOR)

• Retained at buy at UBS; Price Target: $2.15 from $2.35

IGO (IGO)

• Retained at neutral at UBS; Price Target: $5.70 from $6.10

Imricor Medical Systems (IMR)

• Retained at buy at Morgans; Price Target: $0.94 from $0.96

IPD Group (IPG)

• Retained at buy at Bell Potter; Price Target: $5.60

James Hardie Industries (JHX)

• Retained at hold at Ord Minnett; Price Target: $55.00 from $50.00

Lynas Rare Earths (LYC)

• Retained at buy at Ord Minnett; Price Target: $8.00

Neuren Pharmaceuticals (NEU)

• Retained at buy at Bell Potter; Price Target: $28.00

National Storage Reit (NSR)

• Retained at neutral at UBS; Price Target: $2.40

Northern Star Resources (NST)

• Retained at outperform at Macquarie; Price Target: $17.00

• Retained at buy at UBS; Price Target: $16.00

Nextdc (NXT)

• Retained at buy at Citi; Price Target: $19.75

Pro Medicus (PME)

• Downgraded to hold from buy at Jefferies; Price Target: $120.00

Ramsay Health Care (RHC)

• Retained at neutral at Macquarie; Price Target: $50.10

• Downgraded to hold from accumulate at Ord Minnett; Price Target: $46.80 from $49.40

Supply Network (SNL)

• Upgraded to buy from accumulate at Ord Minnett; Price Target: $26.60 from $22.50

Woodside Energy Group (WDS)

• Retained at neutral at Citi; Price Target: $28.00

• Retained at overweight at Morgan Stanley; Price Target: $32.00

Scans