Evening Wrap: ASX 200 up on strong consumer and tech stocks, resources still loving China stimulus, uranium rally continues

The S&P/ASX 200 closed 77.3 points higher, up 0.95%.

10 out of the 11 major ASX sectors rose today, and within them, roughly six stocks for every stock that somehow managed to decline on such an emphatic show of demand-side control.

At 8203.7, today's close was just 5.8 points from a new all-time high. With China stimulus doing wonders for our Resources stocks, interest rate cuts abroad, and good news on the local interest rate front this week – there's very little to suggest the current rally cannot continue.

Click/scroll through for the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all of the key upcoming economic data in tonight's Evening Wrap.

Also, I have detailed technical analysis on the ASX 200, Copper, and Iron Ore in today's ChartWatch.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 77.3 points higher at 8,203.7, 0.95% from its session low and just 0.05% from its high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by an emphatic tidy 240 to 35.

Consumer Discretionary (XDJ) (+2.0%) and Information Technology (XIJ) (+2.0%) stocks resumed their ascendency today as market yields continue to ebb lower on the back of the Fed interest rate cut. Locally, these sectors are also benefiting from a benign RBA meeting this week (hikes off table), as well as continued cooling in the CPI. Interest rate futures are again factoring in 4 x 0.25% RBA rate cuts within the next 12 months.

The Materials (XMJ) (+1.7%) sector continued to bask in the warm afterglow of China stimulus measures announced Tuesday, as well as pledges of further imminent support announced today in Beijing.

Today’s strongest ASX stocks from the strongest sectors

Not so lucky, were Financials (XFJ) (+0.2%), which aren’t allowed to go up any great amount while Materials/Resources are rising, and Energy (XEJ) (-1.1%) which took a hit on lower crude oil prices.

Financials and Energy stocks did it tough today...

ChartWatch

S&P/ASX 200 (XJO)

All quiet on the home front...

The last time we covered the XJO was in ChartWatch in the Evening Wrap on 19 September.

In that update, we had just taken out the previous 8149 all time high, closing nicely out of the 7628-8149 trading range. The general strategy at the time (as it always is), was to simply trust the trend until convincing signs of supply-side control manifested themselves.

Since then, there has been a very mild pullback with far-less-than-convincing supply-side candles. The extent of the retracement was merely to the old 8117-8149 supply-now-demand-zone. It’s doing its job, as can be seen by today’s emphatic demand-side candle.

Dynamic demand from the short term uptrend ribbon isn’t far below, either, it kicks in around 8055-8100.

In summary, candles, price action, trends, and demand zones are intact: ✅✅✅✅

So, when would I begin to be concerned? 🤔

• Lower peaks

• Long black-bodied candles (at least double the length of recent candles, e.g. similar to 4 September)

• A close below 8117-8149, and more particularly, below the short term uptrend ribbon

• Lower troughs (today’s candle sets the 24-Sep low of 8111 as the most recent trough.

Until then, there’s nothing all that interesting to see here for trend followers. Stay the course! 🚢

High Grade Copper Futures (Front month, back-adjusted) COMEX

An interesting chart

The last time we covered copper was in ChartWatch in the Evening Wrap on 20 September.

In that update, I said "I sense we’re one really strong demand-side candle away from really confirming the demand-side is back in control of the copper price."

That candle occurred on Tuesday, albeit with substantial help from the China stimulus package. Technical analysts aren’t concerned about "the why", we just care about "the what happened". How did the demand and supply sides respond to the news…what did they do?

The candles suggest they demanded more and supplied less. Enough said.

There is a good chance a new long term uptrend in copper has commenced. My criteria for the transition have been met – a close above the long term uptrend ribbon, followed by proof it is again acting as dynamic demand. The close occurred as of 19 Sep, with a subsequent test and hold occurring over the 23-Sep and 24-Sep candles. The 23-Sep candle, with its long downward pointing shadow, is a classic test-and-hold candle.

4.391 now transitions from supply to demand. Below that, I expect a substantial zone of demand down to 4.274.

4.762-4.768 is the next logical supply zone. Given the lack of supply-side response following the 24-Sep demand-side candle, I can’t see any reason why the copper price can’t continue to track towards there.

Iron Ore 62% (Front month, back-adjusted) SGX

An interesting chart

The last time we covered the other major potential China stimulus winner, iron ore, was in ChartWatch in the Evening Wrap on 16 September.

In that update, we pondered the timing of the supposed-impending end of year seasonal rally against the back drop of some of the most convincing supply-side technicals one is ever likely to see.

Devine intervention, Beijing intervention, or just pure…dumb…luck. 🤷‍♂️

Iron ore has been given a life line, and it seems to be making a decent fist of it for now. Today’s candle is crucial. It is still live, so we can’t read much into it, but given yesterday’s disappointing long upper shadow (i.e. lurking sell the rally supply), an emphatic demand-side push today is crucial.

Ideally today’s candle closes above yesterday's high of 99.25, as well as closing at or very near the high of the session.

If so, then the next key point of supply at 103 is a chance, then 105.75, 110.15…and the list goes on...and on…Boy there's a bunch of big points of supply after that…!!! 🙈

Demand is now at 95.55, but more likely at 88.40-89.20. That’s the key zone. Below is, 73.60 beckons, versus above it, the seasonal rally is a possibility.

What we don’t want to see in today’s candle, is another long shadow to match yesterday's. This is a distinct possibility, and if it occurs, would likely snuff out this fledgling rally.

Economy

Today

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

Later this week

Thursday

• 22:30 Core Durable Goods Orders August (+0.1% m/m vs -0.2% m/m July)

• 23:20 USA Federal Reserve Chairman Jerome Powell speaks

Friday

• 22:30 USA Core PCE Price Index August (+0.2% m/m forecast to +2.6% p.a. vs +0.2% m/m to +2.6% p.a. July)

• 22:30 USA Personal Income & Personal Spending August (+0.4% m/m forecast vs +0.3% m/m July & +0.3% m/m forecast vs +0.5% m/m July)

Latest News

Interesting Movers

Trading higher

• +16.1% PYC Therapeutics (PYC) - E&P Healthcare Conference Presentation, rise is consistent with prevailing short and long term uptrends (that's why it has been a stalwart of the ChartWatch Scans Uptrends lists!) 🔎📈.

• +13.5% Novonix (NVX) - No news, generally stronger battery metals sector recently, lithium price in China rising today, but also suspect likely short covering in a basket of beaten down stocks.

• +11.4% Brainchip (BRN) - No news, likely short covering in a basket of beaten down stocks.

• +10.0% Strike Energy (STX) - No news, natural gas prices have been rising last few sessions, likely short covering in a basket of beaten down stocks.

• +10.0% Skycity Entertainment Group (SKC) - High Court finalises NZ AML CFT penalty amount, (but probably also a bit of ditto on the short covering too!).

• +7.8% Bannerman Energy (BMN) - No news, tracking US U-stocks higher overnight as well as a small gain in uranium futures, closed back above long term trend ribbon.

• +7.6% Paladin Energy (PDN) - Ditto uranium stocks.

• +7.5% Lotus Resources (LOT) - Ditto uranium stocks.

• +7.4% Tuas (TUA) - Continued positive response to 24 Sep FY24 Investor Presentation, rise is consistent with prevailing short and long term uptrends 🔎📈.

• +7.2% Brickworks (BKW) - Analyst Presentation FY July 2024 and Preliminary Final Report FY July 2024.

• +6.9% Droneshield (DRO) - No news, characteristic volatility.

• +6.9% Imdex (IMD) - No news, rise is consistent with prevailing long term uptrend 🔎📈.

• +6.4% EML Payments (EML) - Continued positive response to yesterday's Board Update, (but probably also a bit of ditto on the short covering too!).

• +6.3% Arafura Rare Earths (ARU) - Ditto no news-short covering?

• +6.0% Nanosonics (NAN) - Change in substantial holding from MUFG (increase), rise is consistent with prevailing short term uptrend, long term uptrend is transitioning from down to up 🔎📈.

• +6.0% Coronado Global Resources (CRN) - SEC Form SD As Filed, likely also still getting some love on China stimulus rally.

• +5.8% Liontown Resources (LTR) - No news, ditto China stimulus rally, ditto short covering?

• +5.4% Boss Energy (BOE) - Ditto uranium stocks.

• +5.2% Nine Entertainment (NEC) - Ditto short covering?

• +5.0% Develop Global (DVP) - Ditto lithium-short covering?

• +4.9% Integral Diagnostics (IDX) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈.

• +4.9% Zip Co. (ZIP) - Annual Report to shareholders and Becoming a substantial holder, rise is consistent with prevailing short and long term uptrends 🔎📈.

• +4.8% Deep Yellow (DYL) - Ditto uranium stocks.

Trading lower

• -12.7% Cettire (CTT) - No news, Pullback after massive rally following 24 Sep 2024 Annual Report.

• -5.0% Austal (ASB) - No news, also a pullback after a recent massive news-inspired rally.

• -3.3% Firefly Metals (FFM) - Highly successful $65m placement to drive growth (stock price went up so management felt compelled to raise cash! 🤑).

• -2.9% Fletcher Building (FBU) - Retail Entitlement Offer Opens.

• -2.9% Macmahon (MAH) - No news.

• -2.7% Woodside Energy Group (WDS) - No news, generally weaker energy sector today on sharp fall in crude oil price.

• -2.3% Santos (STO) - No news, ditto energy sector weakness.

Broker Notes

• AIC Mines (A1M)

  • Retained at buy at Shaw and Partners; Price Target: $1.10

• Adairs (ADH)

  • Initiated at hold at Bell Potter; Price Target: $2.00

• Adriatic Metals (ADT)

  • Retained at add at Morgans; Price Target: $5.30 from $5.80

• Aristocrat Leisure (ALL)

  • Retained at buy at UBS; Price Target: $63.50 from $56.00

• AUB Group (AUB)

  • Retained at outperform at Macquarie; Price Target: $34.20

• Accent Group (AX1)

  • Retained at buy at Bell Potter; Price Target: $2.50

• BHP Group (BHP)

  • Retained at buy at Citi; Price Target: $46.00

• Brickworks (BKW)

  • Retained at buy at Citi; Price Target: $37.50

• Beamtree (BMT)

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

• Car Group (CAR)

  • Retained at buy at Citi; Price Target: $39.50

• Credit Clear (CCR)

  • Retained at buy at Shaw and Partners; Price Target: $0.44

• City Chic Collective (CCX)

  • Retained at hold at Bell Potter; Price Target: $0.16

• Charter Hall Group (CHC)

  • Retained at overweight at Morgan Stanley; Price Target: $18.50 from $15.80

• Champion Iron (CIA)

  • Retained at buy at Citi; Price Target: $7.20

• Coles Group (COL)

  • Downgraded to hold from outperform at CLSA; Price Target: $17.60 from $20.20

  • Retained at neutral at Goldman Sachs; Price Target: $18.00

  • Retained at neutral at Jarden; Price Target: $17.10

  • Retained at hold at Jefferies; Price Target: $17.00

  • Retained at underweight at JP Morgan; Price Target: $18.00

• Cettire (CTT)

  • Retained at buy at Bell Potter; Price Target: $2.00

• Core Lithium (CXO)

  • Downgraded to sell from neutral at Jarden; Price Target: $0.08 from $0.10

• Catalyst Metals (CYL)

  • Retained at add at Morgans; Price Target: $1.32

• Deterra Royalties (DRR)

  • Retained at neutral at Citi; Price Target: $4.35 from $4.10

• Fletcher Building (FBU)

  • Upgraded to outperform from hold at CLSA; Price Target: $3.30 from $3.00

• Fortescue (FMG)

  • Retained at neutral at Citi; Price Target: $19.40

• GPT Group (GPT)

  • Downgraded to neutral from buy at UBS; Price Target: $5.22 from $4.92

• Healius (HLS)

  • Retained at hold at Morgans; Price Target: $1.53 from $1.48

  • Retained at sell at Ord Minnett; Price Target: $1.37

• Hipages Group (HPG)

  • Retained at buy at Shaw and Partners; Price Target: $1.60

• Harvey Norman (HVN)

  • Initiated at buy at Bell Potter; Price Target: $5.80

• Insurance Australia Group (IAG)

  • Retained at outperform at Macquarie; Price Target: $8.00

• Integral Diagnostics (IDX)

  • Retained at buy at Ord Minnett; Price Target: $3.30 from $3.00

• Ingenia Communities Group (INA)

  • Upgraded to buy from neutral at UBS; Price Target: $5.79 from $5.24

• JB HI-FI (JBH)

  • Initiated at buy at Bell Potter; Price Target: $87.00

• Johns Lyng Group (JLG)

  • Retained at overweight at Morgan Stanley; Price Target: $4.40

• Kogan.Com (KGN)

  • Initiated at hold at Bell Potter; Price Target: $5.20

• KMD Brands (KMD)

  • Retained at neutral at Macquarie; Price Target: $0.45 from $0.47

• Lendlease Group (LLC)

  • Retained at buy at Citi; Price Target: $7.10

  • Downgraded to sell from neutral at UBS; Price Target: $6.25

• Light & Wonder (LNW)

  • Retained at buy at Bell Potter; Price Target: $161.00 from $186.00

  • Retained at outperform at Macquarie; Price Target: $169.00 from $186.00

  • Retained at accumulate at Ord Minnett; Price Target: $166.00 from $176.00

  • Upgraded to buy from neutral at UBS; Price Target: $166.00 from $169.00

• Lovisa (LOV)

  • Retained at hold at Bell Potter; Price Target: $33.00

• Mirvac Group (MGR)

  • Downgraded to neutral from buy at UBS; Price Target: $2.29 from $2.14

• Medibank Private (MPL)

  • Retained at neutral at Macquarie; Price Target: $3.85

• Macquarie Group (MQG)

  • Retained at overweight at Morgan Stanley; Price Target: $250.00 from $234.00

• Nick Scali (NCK)

  • Retained at buy at Citi; Price Target: $16.53

• New Hope Corporation (NHC)

  • Retained at neutral at Citi; Price Target: $4.85 from $5.00

• NIB (NHF)

  • Retained at neutral at Macquarie; Price Target: $6.30

• Netwealth Group (NWL)

  • Initiated at hold at Bell Potter; Price Target: $23.90

• Paladin Energy (PDN)

  • Retained at buy at Citi; Price Target: $15.20 from $15.00

• Propel Funeral Partners (PFP)

  • Retained at buy at Bell Potter; Price Target: $6.40

• Premier Investments (PMV)

  • Retained at buy at Bell Potter; Price Target: $37.00

  • Retained at hold at CLSA; Price Target: $30.75 from $33.00

  • Retained at neutral at Jarden; Price Target: $29.50 from $29.80

  • Upgraded to overweight from neutral at JP Morgan; Price Target: $34.50 from $34.00

  • Retained at overweight at Morgan Stanley; Price Target: $35.75 from $39.50

  • Retained at neutral at UBS; Price Target: $31.00 from $33.00

• Platinum Asset Management (PTM)

  • Downgraded to hold from buy at Bell Potter; Price Target: $1.21 from $1.10

• QBE Insurance Group (QBE)

  • Retained at neutral at Macquarie; Price Target: $16.90

• REA Group (REA)

  • Retained at buy at Citi; Price Target: $230.00

• Regis Healthcare (REG)

  • Retained at outperform at Macquarie; Price Target: $6.50 from $5.50

• Retail Food Group (RFG)

  • Retained at buy at Bell Potter; Price Target: $0.11

• Rio Tinto (RIO)

  • Retained at neutral at Citi; Price Target: $123.00

• Regis Resources (RRL)

  • Retained at add at Morgans; Price Target: $2.01

• South32 (S32)

  • Retained at buy at Citi; Price Target: $3.25 from $3.90

• Steadfast Group (SDF)

  • Retained at outperform at Macquarie; Price Target: $6.80

• Stockland (SGP)

  • Retained at buy at Citi; Price Target: $5.30

• Select Harvests (SHV)

  • Downgraded to hold from buy at Ord Minnett; Price Target: $4.35 from $5.15

• Sigma Healthcare (SIG)

  • Retained at neutral at Citi; Price Target: $1.40 from $1.30

  • Retained at hold at Jefferies; Price Target: $1.30 from $1.20

  • Retained at underperform at Macquarie; Price Target: $1.00 from $0.90

  • Retained at hold at Morgans; Price Target: $1.36 from $1.23

  • Retained at accumulate at Ord Minnett; Price Target: $1.40

• Stanmore Resources (SMR)

  • Retained at buy at Citi; Price Target: $3.55 from $3.35

• Suncorp Group (SUN)

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

• Telix Pharmaceuticals (TLX)

  • Retained at buy at Jefferies; Price Target: $33.10 from $32.30

  • Retained at buy at TD Cowen; Price Target: $25.00

  • Retained at overweight at Wilsons; Price Target: $22.00

• Temple & Webster Group (TPW)

  • Retained at hold at Bell Potter; Price Target: $12.20

• Tuas (TUA)

  • Retained at buy at Citi; Price Target: $5.55 from $5.25

  • Retained at overweight at Morgan Stanley; Price Target: $5.50 from $4.30

• Universal Store (UNI)

  • Retained at buy at Bell Potter; Price Target: $7.80

• Vicinity Centres (VCX)

  • Downgraded to sell from neutral at UBS; Price Target: $2.15 from $1.86

• Webjet (WEB)

  • Retained at buy at Citi; Price Target: $8.25

  • Retained at add at Morgans; Price Target: $8.60 from $11.20

• Whitehaven Coal (WHC)

  • Downgraded to accumulate from neutral at Citi; Price Target: $8.30 from $7.60

• Webjet (WJL)

  • Initiated at add at Morgans; Price Target: $0.95

• Woolworths Group (WOW)

  • Retained at hold at CLSA; Price Target: $33.10 from $36.90

  • Retained at buy at Goldman Sachs; Price Target: $40.10

  • Retained at overweight at Jarden; Price Target: $38.60

  • Retained at hold at Jefferies; Price Target: $33.00

  • Retained at neutral at JP Morgan; Price Target: $35.50

Scans