Evening Wrap: ASX 200 scores a century, now within reach of a record as energy and mining stocks finally rebound

Cop that!

We might have lost the cricket this morning, and leads from the US were equally lousy, but Aussie shares were having none of it today.

+105 points to the better, a substantially broad based move (3.5 risers for each faller), and a close that was smack-bang on the high of the day.

=✅✅✅

Each factor is a strong endorsement of the current, albeit tediously vacillating, bull market. We're now just 72 points from a new record high and I've got the technicals for the ASX 200 (as well as the Nasdaq and uranium futures) for you in today's ChartWatch.

You'll also find all the key details of today's big move, including good news – finally a rally in beaten down lithium and battery materials stocks.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 105.1 points higher at 7,838.8, 1.32% from its session low and smack-bang on its session high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by an impressive 214 to 61. This is important because broad-based moves which close at the high of the session are more likely to be sustainable.

All 11 of the major ASX sectors were higher, but finally, it had to happen sometime between today and the end of time immortal: Energy (XEJ) (+2.2%) and Resources (XJR) (+1.9%) were the two best performing sectors.

Certainly, crude oil prices were higher overnight, but that’s about all I’ve got in terms of explanations. Base metals and iron ore are generally lower, and lithium is even worse today…Perhaps it was just their time!?

The best of the Energy and Resources sectors today

Or, maybe, just maybe, the big funds are doing a bit of switching into these beaten down sectors ahead of financial year end on Friday (well that’s the last trading day, anyway).

Really, given the mediocre overseas leads we had to go on today, the explanation of: “EOFY shenanigans” is one I expect to put to good use over the next three trading sessions!

Also doing well today were Real Estate (XRE) (+1.7%) and Financials (XFJ) (+1.45%) – possibly here stocks benefited from lower market yields.

There were underperformers, though. As in all 7 of the other sectors (i.e., they finished with gains less than the ASX 200). You could say that Gold (XGD) (+0.23%) and Information Technology (XIJ) (+0.32%) did it “tough” today.

ChartWatch

S&P/ASX 200 (XJO)

So close you can almost touch it!

The last time we covered the XJO was in ChartWatch in the Evening Wrap on 21 Jun.

Just a quick update here, because just as in our last update – we’re still largely marking time within the well defined 7489-7911 trading range.

But! Today’s long white bodied candle with its high close is a welcome signal the demand-side remains active – at least more substantially so than the supply side was yesterday!

We’re close – oh so very close here...

The long term uptrend continues to signal broad support for Australian equities and regular buy the dip activity. In theory, it therefore should be a mere formality that we close above 7911, print a new high, and set course for an 8-handle (and then some).

That’s the theory. The practice will be what it will be…and I suggest we’ll need at least a bit of support from the next chart to make it happen…

NASDAQ Composite Index (IXIC)

Nothing goes up in a straight line.

The last time we covered the Nasdaq Composite was in ChartWatch in the Evening Wrap on 12 Jun.

At that time it was marching higher without even a glimmer of supply-side volatility (i.e., long black bodied candles and ore long upward pointing shadows).

Over the last three trading sessions, we have observed modest supply-side volatility, the most of which occurred in Thursday’s and Monday’s candles.

It appears the supply side has grappled control from the demand side at least temporarily. The price action remains rising peaks and rising troughs, and the long term trend remains up – both solid indicators of continuing longer term demand-side control.

The short term trend ribbon is expected to offer dynamic demand, and there’s a couple of credible static points of demand at the 6 June high of 17235 and the 28 May high of 17032.

I propose the short term uptrend remains intact as long as the Nasdaq Composite continues to close above these levels.

Supply is now 17937. We must see a close above it to continue the short term uptrend.

Uranium Futures (Front month, back-adjusted) COMEX

On the verge of dipping into a long term downtrend

The last time we covered uranium was in ChartWatch in the Evening Wrap on 19 June.

In that update it was just turning down from previous demand at 86.75 (note a new futures contract has become the front month, and therefore prices have been back-adjusted resulting in the pervious point of demand at 86.60 rising to 86.75).

The short term downtrend is now even more entrenched, and the long term trend is growing more neutral. Note that along with respecting previous points of demand as points of supply (typical of supply-side control), the short term downtrend ribbon is proving to be a dynamic zone of excess supply.

The short term downtrend is intact until the uranium price can close above the short term downtrend ribbon, but preferably also, return to printing rising peaks and rising troughs (i.e. demand reinforcement and supply removal).

The great risk I can see here, is the uranium price closing below the long term trend ribbon as well as the now crucial 83.65 point of demand.

If that occurs, and given we’ve have seen price action within the long term trend ribbon that suggests it is transitioning to offering dynamic supply – I will be forced to declare a new long term downtrend in the uranium price.

Economy

Today

• 10:30 AUS Westpac Consumer Sentiment June

  • +1.7% to 83.6 vs -0.3% in May

  • Despite the improvement, consumer sentiment is still firmly in deeply pessimistic territory (‘neutral’ level = 100), so pessimists outnumber optimists by nearly 20ppts

  • Consumers took positives from upcoming fiscal support measures (tax cuts) but are still negative on inflation and the interest rate outlook

Later this week

Wednesday

• 00:00 USA Conference Board Consumer Confidence June (100.2 forecast vs 102 in May)

• 11:30 AUS Consumer Price Inflation (CPI) May (3.5% p.a. forecast vs 3.6% p.a. in April)

Thursday

• 00:00 USA New Home Sales May (650,000 forecast vs 634,000 in April)

• 11:00 AUS MI Inflation Expectations May (4.1% p.a. in April)

• 22:30 USA Core Durable Goods Orders May (+0.1% forecast vs +0.4% in April)

Friday

• 00:00 USA Pending Home Sales May (-7.7% in April)

• 22:30 USA Core PCE Price Index May (+0.1% to +2.5% p.a. forecast vs +0.2% to +2.7% p.a. in April)

• 22:30 USA Personal Income May (+0.4% forecast vs +0.3% in April)

• 22:30 USA Personal Spending May (+0.3% forecast vs +0.2% in April)

Latest News

Interesting Movers

Trading higher

• +15.2% Calix (CXL) - Calix announces update on DAC projects

• +11.6% Spartan Resources (SPR) - No news, 98.2M share block traded at A$0.89, rise is consistent with prevailing short and long term uptrends (see ChartWatch Scans articles - heavily featured in Uptrends lists) 🔎📈

• +8.9% Core Lithium (CXO) - No news, bounce in ASX lithium and battery metals stocks today, possibly due to similar rally in US counterparts Monday…otherwise your guess is as good as mine with lithium prices down heavily again today…🤔

• +8.8% Novonix (NVX) - Ditto for CXO

• +7.3% Collins Foods (CKF) - FY24 Appendix 4E and Annual Report 2024

• +6.5% Chalice Mining (CHN) - Ditto for NVX

• +6.5% Myer (MYR) - Continued positive response to yesterday's Proposal received from Myer Holdings Limited

• +4.7% 29METALS (29M) - Ditto for CHN

• +4.6% James Hardie Industries (JHX) - 2024 Investor Day - Day Two Slides

• +4.5% Cooper Energy (COE) - Change in substantial holding (increase), rise is consistent with prevailing short and long term uptrends 🔎📈

• +4.4% Zip Co. (ZIP) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +4.1% Southern Cross Electrical Engineering (SXE) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +3.9% West African Resources (WAF) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

Trading lower

• -7.7% Winsome Resources (WR1) - Application for quotation of securities - WR1, fall is consistent with prevailing short and long term downtrends 🔎📉

• -6.1% Red 5 (RED) - Change in substantial holding (decrease), CEO share sale 5.4M shares

• -5.8% Polynovo (PNV) - No news 🤔

• -5.1% Paladin Energy (PDN) - Paladin Energy to acquire Fission Uranium

• -3.0% Droneshield (DRO) - No news 🤔 (pullback after massive rally)

Broker Notes

• Aristocrat Leisure (ALL)

  • Retained at buy at UBS; Price Target: $56.00 from $44.20

• Capitol Health (CAJ)

  • Downgraded to hold from buy at Bell Potter; Price Target: $0.33 from $0.29

• City Chic Collective (CCX)

  • Downgraded to hold from buy at Bell Potter; Price Target: $0.20 from $0.62

• Cleanaway Waste Management (CWY)

  • Retained at buy at Bell Potter; Price Target: $3.15 from $3.10

  • Retained at outperform at Macquarie; Price Target: $3.15 from $3.20

• Evolution Mining (EVN)

  • Retained at outperform at Macquarie; Price Target: $4.20 from $4.30

• Imdex (IMD)

  • Retained at neutral at Citi; Price Target: $2.00

• James Hardie Industries (JHX)

  • Retained at hold at Jefferies; Price Target: $52.60

  • Retained at neutral at JP Morgan; Price Target: $50.00

  • Retained at outperform at Macquarie; Price Target: $55.00

  • Retained at sector perform at RBC Capital Markets; Price Target: $49.00

• LGI (LGI)

  • Initiated at buy at Shaw and Partners; Price Target: $3.60

• Light & Wonder (LNW)

  • Initiated at neutral at UBS; Price Target: $162.00

• Monadelphous Group (MND)

  • Upgraded to buy from hold at Argonaut Securities; Price Target: $14.45

• Metalstech (MTC)

  • Retained at buy at UBS; Price Target: $4.00 from $4.25

• Metcash (MTS)

  • Retained at neutral at Citi; Price Target: $4.00

  • Retained at buy at CLSA; Price Target: $4.40 from $4.60

  • Upgraded to neutral from negative at E&P; Price Target: $3.93 from $3.77

  • Retained at neutral at Goldman Sachs; Price Target: $3.73

  • Retained at overweight at Jarden; Price Target: $4.40 from $4.20

  • Retained at buy at Jefferies; Price Target: $4.10 from $4.30

  • Retained at outperform at Macquarie; Price Target: $4.20

  • Retained at equal-weight at Morgan Stanley; Price Target: $3.83 from $4.05

• Origin Energy (ORG)

  • Initiated at buy at Citi; Price Target: $12.00

• Paladin Energy (PDN)

  • Retained at buy at Citi; Price Target: $17.00

  • Retained at overweight at Morgan Stanley; Price Target: $16.65

• Premier Investments (PMV)

  • Retained at buy at Citi; Price Target: $36.00

  • Downgraded to neutral from positive at E&P; Price Target: $33.62 from $33.87

  • Retained at sell at Goldman Sachs; Price Target: $25.10

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

• Resmed Inc (RMD)

  • Downgraded to neutral from buy at Citi; Price Target: $30.00 from $36.00

• Steadfast Group (SDF)

  • Retained at neutral at Goldman Sachs; Price Target: $6.10

  • Retained at equal-weight at Morgan Stanley; Price Target: $6.17 from $6.10

  • Retained at buy at UBS; Price Target: $6.70

• The Star Entertainment Group (SGR)

  • Retained at outperform at CLSA; Price Target: $0.52 from $0.58

  • Retained at underperform at Jefferies; Price Target: $0.43

  • Retained at neutral at JP Morgan; Price Target: $0.47 from $0.50

  • Retained at neutral at Macquarie; Price Target: $0.45 from $0.50

  • Downgraded to hold from add at Morgans; Price Target: $0.50 from $0.65

  • Retained at neutral at UBS; Price Target: $0.50 from $0.52

• Strike Energy (STX)

  • Retained at neutral at Macquarie; Price Target: $0.22

• Telstra Group (TLS)

  • Retained at buy at Bell Potter; Price Target: $4.20 from $4.25

• Webjet (WEB)

  • Retained at buy at Citi; Price Target: $10.70

  • Retained at equal-weight at Morgan Stanley; Price Target: $9.30

Scans