Evening Wrap: ASX 200 surges, nears record as investors scramble into property, tech, and consumer stocks. Gold-silver melt-up continues

The S&P/ASX 200 closed 127.6 points higher, up 1.65%.

How sweet it is. +127 of the best of them today.

And you would have to be pretty unlucky to have any stocks in your portfolio that actually went down – such was the magnitude and broad-based nature of today’s rally (Ok, I knew YOU 🫵 would be the only one to contradict that statement! Unluckiest investor in the world…)

With interest rate cut expectations on the rise, naturally it was the key "interest rate sensitives" as I like to call them of Property, Technology, and Consumer Discretionary which dominated the winners list today.

There was one notable laggard, though. I wonder if you can guess who it was?

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 127.6 points higher at 7,881.3, 1.65% from its session low and just 0.24% from its high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by an impressive 214 to 67.

Ordinarily given the magnitude of today’s index-level move, I'd get to write "all eleven of the major ASX sectors were up today". Well they weren't. Before I tell you, guess which was the only sector that fell today...go on...guess!

Yep, the Energy (XEJ) (-0.29%) sector let us down. It wasn't a big fall, but it does show up Energy's ongoing underperformance of the broader market. It seems that in a burgeoning commodities bull market, crude oil, coal, and natural gas have been notably left behind. 🤔

S&P/ASX 200 Energy Sector Index (XEJ) vs S&P/ASX200 Index (XJO) since 10 August 2023

Naturally with interest rate cut expectations on the rise, so too are the prices of shares in the interest rate sensitive sectors of Real Estate Investment Trusts (XPJ) (+3.5%), Information Technology (XIJ) (+3.4%), and Consumer Discretionary (XDJ) (+2.4%).

Pretty much in that exact order these are the three sectors that have the most to gain from falling interest rates.

The best of the interest rate sensitives today

Also doing well today was the Gold (XGD) (+2.4%) sub-index. Why? I've got plenty of coverage on rising gold and silver prices for you in today's ChartWatch below.

The best of the gold sector today

ChartWatch

Silver Futures COMEX

And silver gest the gold!

Given that today I published Part 1 of my two-parter on silver and ASX silver stocks, I thought it would be a good time to catch up on this chart, after all I haven’t run it here since the ChartWatch on 30 April.

Silver was at an interesting juncture then, and I suggested “white candles and or downward pointing shadows into 26.26-26.85 would be telltale signals of incoming demand.”

I kinda nailed it, because that’s exactly what occurred. Then, after silver logged that big white candle on 6 May closing back above the short term uptrend ribbon, there really has been zero looking back.

The very shallow pullback to 27.24, followed by the big white candle on 9 May confirmed the resumption of the short and long term uptrends. The price has since continued to probe overhead supply above 29.29, logging almost exclusively demand-side candles.

Note that the last candle in the chart above is today’s fledgling 16 May candle. Discount it. The second from last candle for 15 May is the key one to note – again it’s big and it’s white. There’s plenty of excess demand around.

Silver is going to require every bit of this demand, however, if the supply lurking at the 30.19 high is to be soaked up and dispensed with.

Above there, you’ll have to zoom out to the weekly chart to find the next major points of supply at 31.21 and 32.76.

There’s nothing in the current technicals to suggest that silver can’t dislodge 30.19, and therefore probe those two higher supply points.

Still, one should never assume. There’s still work to be done.

Continued white bodied candles and or downward pointing shadows between here and demand between 28.18-29.00 will confirm the demand side is just biding its time – and the breakout is pending.

On the other hand, big black bodies and or upward pointing shadows would signal the supply side is resolute at 30.19, and enough of these candles could set silver up for a double top pattern.

Gold Futures COMEX

Gold gets a silver medal in its race with silver

Gold is definitely running second to silver at the moment, but that doesn’t mean its technicals aren’t also very solid. They are.

Short and long erm trends are up, well established, and accelerating. The price action is back to rising peaks and rising troughs. The candles are predominantly demand-side in nature.

Where gold gets the silver medal, though, is the extensions on its rally aren’t nearly as decisive as those for silver, and similarly, gold’s pullbacks are a touch more severe.

It’s subtle, but it does speak to less conviction among participants in the gold market compared those in silver.

2433-2449 is supply, and it’s still a little ways away. Demand is at 2337 and the short term uptrend ribbon.

Like with silver, candles from here will tell the story. They always do. Ditto from the silver analysis…you know white candles good-black candles bad stuff!

Economy

Today

• AUS Employment change and unemployment rate April

  • 38.5k vs +25.3k forecast and -6.6k in March = Better than expected

  • Full-time employment increased by 19,600 and part-time employment increased by 11,300

  • Unemployment rate 4.1% vs 3.9% forecast and 3.8% in March = Worse than expected, but participation rate ticked up 0.1% to 66.7% explains part of the jump

Later this week

Friday

• 12:00 CHN 'Data Dump' (Industrial Production, Retail Sales, Fixed Asset Investment, Unemployment Rate)

Latest News

Interesting Movers

Trading higher

• +12.3% Aristocrat Leisure (ALL) - HY24 Investor Presentation, closed back above short and long term trend ribbons 🔎📈

• +9.0% Appen (APX) - No news, broad-based strength in Tech sector today, likely caught a ride, closed back above short term downtrend ribbon 🔎📈

• +8.8% Chalice Mining (CHN) - No news, support for critical minerals in Federal Budget, rise is consistent with prevailing short term uptrend, rising peaks and rising troughs 🔎📈

• +8.0% Duratec (DUR) - No news 🤔

• +7.4% Pantoro (PNR) - Response to ASX Query Letter, bounced off short term uptrend ribbon, long term trend is transitioning from down to up 🔎📈

• +7.0% Vulcan Energy Resources (VUL) - No news, support for critical minerals in Federal Budget, rise is consistent with prevailing short term uptrend, rising peaks and rising troughs, long term trend is transitioning from down to up 🔎📈

• +6.7% Charter Hall Group (CHC) - No news, broad-based strength in Property sector today, rise is consistent with prevailing long term uptrend, bounced off long term uptrend ribbon, closed back above short term trend ribbon 🔎📈

• +6.6% Resolute Mining (RSG) - No news, broad-based strength in Gold sector today, rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.5% Netwealth Group (NWL) - No news, broad-based strength in Tech sector today, rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.3% Incitec Pivot (IPL) - 2024 Half Year Results Announcement, rise is consistent with prevailing short term uptrend, rising peaks and rising troughs, long term trend is transitioning from down to up 🔎📈

• +5.0% The A2 Milk Company (A2M) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +4.9% Silver Lake Resources (SLR) - No news, broad-based strength in Gold sector today, rise is consistent with prevailing short and long term uptrends 🔎📈

• +4.8% Xero (XRO) - No news, broad-based strength in Tech sector today, rise is consistent with prevailing long term uptrend, close back above short term trend ribbon 🔎📈

• +4.8% Perseus Mining (PRU) - Becoming a substantial holder, broad-based strength in Gold sector today, rise is consistent with prevailing short and long term uptrends 🔎📈

Trading lower

• -8.2% Strike Energy (STX) - No news, fall is consistent with prevailing short and long term downtrends 🔎📈

• -8.0% Latin Resources (LRS) - No news, lithium prices down sharply last two days likely weighing on sector sentiment

• -7.7% Renascor Resources (RNU) - No news, pullback after yesterday's heroics

• -7.6% PYC Therapeutics (PYC) - RP11 Clinical Trial Dosing Completed in Cohort 4

• -5.5% Jupiter Mines (JMS) - No news, pullback after a monster run

• -5.0% Predictive Discovery (PDI) - No news, fall is consistent with prevailing short term downtrend, long term trend is transitioning from up to down 🔎📈

• -5.0% Avita Medical Inc (AVH) - No news, fall is consistent with prevailing short and long term downtrends 🔎📈

• -4.5% Arcadium Lithium (LTM) - No news, tracked its NYSE counterpart, lithium prices down sharply last two days likely weighing on sector sentiment, fall is consistent with prevailing short and long term downtrends 🔎📈

• -4.5% Wildcat Resources (WC8) - No news, lithium prices down sharply last two days likely weighing on sector sentiment

Broker Notes

• AIC Mines (A1M) retained at buy at Shaw and Partners; Price Target: $0.90

• Australian Agricultural Company (AAC) retained at buy at Bell Potter; Price Target: $2.00

• ALS (ALQ) retained at neutral at UBS; Price Target: $13.30

• Camplify Holdings (CHL)

  • Retained at add at Morgans; Price Target: $2.55 from $2.85

  • Retained at buy at Ord Minnett; Price Target: $2.39 from $2.71

• CSR (CSR)

  • Retained at hold at Bell Potter; Price Target: $9.00

• Insurance Australia Group (IAG)

  • Retained at buy at Citi; Price Target: $6.75

  • Retained at outperform at Macquarie; Price Target: $6.40

  • Retained at equal-weight at Morgan Stanley; Price Target: $5.45

  • Retained at neutral at UBS; Price Target: $6.50

• IDP Education (IEL) retained at hold at Morgans; Price Target: $20.20 from $23.10

• Imdex (IMD) retained at neutral at Citi; Price Target: $2.20

• Incitec Pivot (IPL) retained at neutral at Citi; Price Target: $2.65

• James Hardie Industries (JHX) retained at neutral at Macquarie; Price Target: $62.40

• Jumbo Interactive (JIN) retained at overweight at Morgan Stanley; Price Target: $20.80

• Mineral Resources (MIN) retained at overweight at Morgan Stanley; Price Target: $83.00

• Pilbara Minerals (PLS) retained at underweight at Morgan Stanley; Price Target: $3.35

• QBE Insurance Group (QBE) retained at buy at UBS; Price Target: $21.00

• South32 (S32) retained at overweight at Morgan Stanley; Price Target: $3.35

• Suncorp Group (SUN)

  • Retained at neutral at Citi; Price Target: $16.00

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

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

  • Retained at overweight at Morgan Stanley; Price Target: $17.05

  • Retained at buy at UBS; Price Target: $18.20

• Xero (XRO) upgraded to overweight from neutral at Jarden; Price Target: $141.00 from $110.00

Scans