Evening Wrap: ASX 200 up on surging copper stocks, as BHP, RIO, and SFR log big gains

The S&P/ASX 200 closed 23.2 points higher, up 0.27%.

A new record high in the copper price was the trigger for strong moves in ASX copper stocks today. The heavy lifting in the ASX 200, however, was done by the stocks with the heaviest weighing in the benchmark, like BHP Group (BHP) (+3.6%), Rio Tinto (RIO) (+3.9%), CSL (CSL) (+1.8%), and ANZ Group (ANZ) (+1.7%).

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

Also, I have detailed technical analysis on the S&P/ASX 200 in today's ChartWatch.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 23.2 points higher at 8,618.4, 0.6% from its session low and smack–bang on its session high. Sounds good, right? Wall of demand and such? Well before you get too excited, consider that in the broader-based S&P/ASX 300 (XKO) advancers lagged decliners by a disturbing 85 to 197.

Fund flows: The "big" bench press 💪

It looked like an up day on the ASX 200 a.k.a. the Old Tin Pot, didn't it? Well the mainstream evening wraps will no doubt report this. We know how to look beneath the thin veneer of a 23 point gain in the benchmark – using market breadth (i.e., bloody terrible) and fund flows (i.e., a very "big" bench press today!).

Resources (XJR) (+0.9%) (read as BHP & RIO) + Financials (XFJ) (+0.6%) (read as the big banks)

Add in Energy (XEJ) (+0.6%) (read as Santos (STO) (+1.2%) and Woodside Energy (WDS) (+0.6%)) Plus Health Care (XHJ) (+0.5%) (read as CSL (CSL) (+1.8%)) and Wesfarmers (WES) (+0.4%)...

= There's your "strong" performance on the ASX 200.

But we could have stopped at just ANZ Group (ANZ) (+1.7%), BHP Group (BHP) (+3.6%), Commonwealth Bank of Australia (CBA) (+0.8%), National Australia Bank (NAB) (+0.2%) and Rio Tinto (RIO) (+3.9%).

One can't even say "Resources was strong today", because outside of BHP, RIO, and the copper stocks, there was plenty of pain in lithium, critical minerals, and precious metals – in many cases – acute pain! 🤕

Then we get to the rest: a very soft underbelly of Real Estate (XPJ) (-2.2%), Consumer Staples (XSJ) (-0.9%), Communication Services (XTJ) (-0.5%) and Utilities (XUJ) (-0.3%) and Consumer Discretionary (XDJ) (-0.2%). I.e., pretty much everything else!

In summary, today's "23.2 point close at the session high" gain creates more questions about the fledgling rally since the 8383 low than it answers... more on that in ChartWatch below!

Stock Specific: Cop(per) that! 🤛

While we're on the subject of mainstream evening wraps, I note that one of them reported that a new record high in the copper price was the trigger for strong moves in ASX copper stocks today.

Um, that record high was Tuesday, I know, because covered it in ChartWatch Markets. Let's give them the benefit of the doubt, however, and note that Wednesday indeed saw another record high in LME copper (chart below)!

As we saw with silver stocks today, though, a rampant commodity price doesn't always translate into corresponding gains in the stocks determined to claw it out of the ground – so it's worth maintaining a positive but sensible approach towards copper's current heroics.

Today's best blue chip gainers

Today's worst blue chip losers

ChartWatch

S&P/ASX 200 (XJO)

Analysis

In keeping with the recent malaise, yesterday's null-but-if-you-squint-it's-a-bit-bearish candle has been followed by a null-but-if-you-squint-it's-a-bit-bullish candle!

Today's candle has a white body, a close smack-bang on its high, and a downward pointing shadow that reached below yesterday's low.

• White body = demand side control

• Close on high = sustained excess demand through the session – the only thing that stopped them buying more was ding, ding, ding... the market closed!

• Downward pointing shadow reaching below yesterday's low (in combination with the above) = there was some supply at the open – following through from yesterday's candle – but it was overwhelmed by excess demand.

So, perhaps today's candle is a stronger showing of demand-side control than I initially gave it credit for! Perhaps, but it remains small by the standards set in the move down from 9116 to 8383 – and what about that terrible market breadth!!!

Add in another below average volume bar, and the lack of commitment among both sides of the market suggests it probably won't take a great deal to swing the balance back the other way.

With this in mind, the short term trend ribbon still holds the key for me. If it holds, that is, if we see an increasing number of supply-side showings here – particularly candles with long upward pointing shadows into the ribbon – then another look at 8383 is a very real possibility.

But, if we can close back above it (presently 8642-8698), then it will confirm that the move from 8383 is more than a bounce – it's developing into a very credible rally.

Given the increasing proximity of the short term trend ribbon, I suggest we'll have an answer one way or the other pretty soon...

View

I remain comfortable at 1/3RP 🪣 (i.e., my personal allowable capital allocation limit (Risk Position) for my investments in Australian stocks is 33%).

Key levels

8383 is the closest point of demand. A close below this price would confirm the new long term downtrend (i.e., that the bull market in ASX stocks is over! 🤯). The short term trend ribbon is the closest zone of supply (presently 8642-8696). In the absence of other confirming demand-side control signals, the ASX 200 must close back above this zone to demonstrate the demand-side is back in control.

Economy

Today

• AUS October Household Spending

  • Result: +1.3% m/m vs +0.6% m/m forecast and +0.2% m/m in September; +5.6% p.a. vs +4.6% p.a. in September

  • Expert comment: "The Household Spending Indicator is a rather new set of data which replaces the long-running retail sales report, so it is still prone to volatility and a lot of revisions. If we trust this new set of numbers, then it seems like household spending has regained momentum after a softer third quarter... Overall, today’s data underscores the RBA’s view that household spending is recovering and there is some “tightness” in the supply capacity of the economy. " — My Bui, Economist, AMP

Later this week

Friday

• No major economic data releases scheduled for Friday.

Saturday

• 02:00 USA November Core PCE Price Index (+0.2% m/m forecast vs +0.2% m/m in October)

  • Personal Income: (+0.3% m/m forecast vs +0.4% m/m in October)

  • Personal Spending: (+0.3% m/m forecast vs +0.6% m/m in October)

• 02:00 USA November Prelim UoM Consumer Sentiment (52.0 forecast vs 51.0 in October)

• 02:00 USA November Prelim UoM Inflation Expectations

Latest News

Interesting Movers

Trading higher

• +15.6% Cettire (CTT) – No news, rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up 🔎📈

• +14.2% HOT Chili (HCH) – No news, general strength across the broader Copper sector today, rise is consistent with prevailing short and long term uptrends, added to ChartWatch ASX Scans Uptrends list yesterday 🔎📈

• +9.4% Develop Global (DVP) – No news, general strength across the broader Copper sector today.

• +8.0% Capstone Copper Corp. (CSC) – No news, general strength across the broader Copper sector today.

• +6.8% Waratah Minerals (WTM) – Waratah appoints MUFG Corporate Governance.

• +6.4% Lumos Diagnostics Holdings (LDX) – No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.8% Lindian Resources (LIN) – Appointment of Processing Manager at Kangankunde Operations, rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.4% Grange Resources (GRR) – Becoming a substantial holder (First Sentier Group 5.0%), general strength across the broader Iron Ore sector today, rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +3.0% Sandfire Resources (SFR) – No news, general strength across the broader Copper sector today.

Trading lower

• -20.1% Vulcan Energy Resources (VUL) – Sucessful Completion of Institutional Placement and EO, general weakness across the broader Lithium sector today.

• -15.8% Dateline Resources (DTR) – No news since 03-Dec Drilling Confirms Strong Grades in North Pipe, general weakness across the broader Critical Minerals sector today.

• -10.3% European Lithium (EUR) – No news, general weakness across the broader Lithium sector today.

• -9.4% Sun Silver (SS1) – No news, general weakness across the broader Silver sector today.

• -8.8% Boab Metals (BML) – No news, general weakness across the broader Silver sector today.

• -8.3% Lake Resources (LKE) – No news, general weakness across the broader Lithium sector today.

• -8.2% Argosy Minerals (AGY) – No news, general weakness across the broader Lithium sector today.

• -7.0% Pantoro Gold (PNR) – Scotia Underground Depth Extensions Confirmed, general weakness across the broader Precious Metals sector today.

• -6.6% Polymetals Resources (POL) – No news since 03-Dec Polymetals raises $34m for the Endeavor Silver Zinc Mine, general weakness across the broader Silver sector today.

• -6.6% EBR Systems (EBR) – No news, fall is consistent with prevailing short and long term downtrends, a regular in ChartWatch ASX Scans Downtrends list 🔎📉

• -6.4% Investigator Resources (IVR) – No news, general weakness across the broader Silver sector today.

• -6.0% St Barbara (SBM) – No news, general weakness across the broader Precious Metals sector today.

• -6.0% Liontown Resources (LTR) – No news, general weakness across the broader Lithium sector today.

• -5.9% Firefly Metals (FFM) – Highly successful A$139m raising to fund growth and studies, general weakness across the broader Precious Metals sector today.

Broker Moves

4DMedical (4DX)

• Retained at speculative buy at Bell Potter; Price Target: $2.50 from $2.25

Ansell (ANN)

• Retained at neutral at Citi; Price Target: $36.50 from $35.50

Amotiv (AOV)

• Retained at outperform at Macquarie; Price Target: $11.66

Eagers Automotive (APE)

• Retained at outperform at Macquarie; Price Target: $29.98

ARB Corporation (ARB)

• Retained at outperform at Macquarie; Price Target: $44.90

Arena REIT (ARF)

• Initiated at hold at Jefferies; Price Target: $3.78

Autosports Group (ASG)

• Retained at outperform at Macquarie; Price Target: $4.85

Aurum Resource (AUE)

• Initiated at speculative buy at Canaccord Genuity; Price Target: $1.50

Bapcor (BAP)

• Retained at neutral at Macquarie; Price Target: $2.90

Bank of Queensland (BOQ)

• Upgraded to hold from lighten at Ord Minnett; Price Target: $6.00

BlueScope Steel (BSL)

• Upgraded to neutral from underperform at Bank of America; Price Target: $24.50 from $23.30

BWP Trust (BWP)

• Initiated at hold at Jefferies; Price Target: $3.79

Charter Hall Group (CHC)

• Retained at buy at Citi; Price Target: $26.10

• Initiated at buy at Jefferies; Price Target: $31.76

Centuria Industrial REIT (CIP)

• Initiated at hold at Jefferies; Price Target: $3.41

Centuria Capital Group (CNI)

• Initiated at buy at Jefferies; Price Target: $2.76

Centuria Office REIT (COF)

• Initiated at underperform at Jefferies; Price Target: $0.94

Charter Hall Retail REIT (CQR)

• Initiated at hold at Jefferies; Price Target: $4.32

Cleanaway Waste Management (CWY)

• Retained at overweight at Morgan Stanley; Price Target: $3.11

Dexus (DXS)

• Initiated at underperform at Jefferies; Price Target: $6.02

Elders (ELD)

• Retained at outperform at Macquarie; Price Target: $8.25

FleetPartners Group (FPR)

• Retained at outperform at Macquarie; Price Target: $3.59

Goodman Group (GMG)

• Initiated at buy at Jefferies; Price Target: $36.11

Graincorp (GNC)

• Retained at outperform at Macquarie; Price Target: $8.80

GPT Group (GPT)

• Initiated at buy at Jefferies; Price Target: $6.68

HealthCo Healthcare and Wellness REIT (HCW)

• Initiated at hold at Jefferies; Price Target: $0.79

HomeCo Daily Needs REIT (HDN)

• Initiated at buy at Jefferies; Price Target: $1.58

Lotus Resources (LOT)

• Retained at speculative buy at Canaccord Genuity; Price Target: $0.31

McMillan Shakespeare (MMS)

• Retained at outperform at Macquarie; Price Target: $19.69

Megaport (MP1)

• Retained at buy at Citi; Price Target: $16.30

Many Peaks Minerals (MPK)

• Initiated at speculative buy at Canaccord Genuity; Price Target: $1.85

Nufarm (NUF)

• Retained at neutral at Macquarie; Price Target: $2.77

Nuix (NXL)

• Retained at sector perform at RBC Capital Markets; Price Target: $2.60

Orica (ORI)

• Retained at outperform at Macquarie; Price Target: $25.95

Polymetals Resources (POL)

• Retained at speculative buy at Ord Minnett; Price Target: $1.35 from $1.60

Perseus Mining (PRU)

• Retained at buy at Argonaut Securities; Price Target: $6.50 from $6.30

• Retained at neutral at Citi; Price Target: $4.80

• Retained at buy at Euroz Hartleys; Price Target: $0.80 from $0.75

• Retained at overweight at JPMorgan; Price Target: $6.10

• Downgraded to lighten from hold at Ord Minnett; Price Target: $4.60

• Retained at buy at UBS; Price Target: $6.65

QPM Energy (QPM)

• Retained at speculative buy at Ord Minnett; Price Target: $0.11 from $0.13

Region Group (RGN)

• Initiated at hold at Jefferies; Price Target: $2.51

Scentre Group (SCG)

• Initiated at hold at Jefferies; Price Target: $4.21

Smartgroup Corporation (SIQ)

• Retained at outperform at Macquarie; Price Target: $8.99

Southern Cross Electrical Engineering (SXE)

• Retained at buy at Shaw and Partners; Price Target: $2.40

Transurban Group (TCL)

• Retained at buy at Citi; Price Target: $16.10

Trajan Group Holdings (TRJ)

• Retained at buy at Bell Potter; Price Target: $1.25

Vicinity Centres (VCX)

• Initiated at hold at Jefferies; Price Target: $2.47

Wisetech Global (WTC)

• Retained at buy at Goldman Sachs; Price Target: $115.00

• Retained at overweight at JPMorgan; Price Target: $120.00

• Upgraded to outperform from sector perform at RBC Capital Markets; Price Target: $110.00 from $120.00

• Retained at buy at UBS; Price Target: $115.00 from $130.00

Scans