Afternoon Report / ASX hits 6500, ‘old school’ energy & financials lead the way, Crown cans junkits (CWN, REA)


The ASX 200 has now traded up the 6500 level and my ‘gut feel’ is we’ll see at least some consolidation around this range similar to how the ASX pinged itself back to the 6000 level when it was trading in the  5700/6250 trading range between June & early November. While we remain bullish stocks into the end of 2020 /early 2021 with the view that we’ve entered a new trading range, things are looking tired in the short term. About half the market was up today / half down however it continues to be the recovery trade that performs best at the expense of the previously hot names, Whitehaven (WHC) +8% v Afterpay (APT) -6% a clear example of that thematic, while  beaten up Ive Group (IGL) also caught some attention today up by ~15%, taking it’s gain in the last 4 sessions to 44%.

Banks were strong, ANZ the best of them up by 2.45% while there was also decent buying in Energy (BPT + 7.44%) and Mining Services (MND +5.47%) which suits MM’s current positioning across our growth portfolio which is skewed towards those areas. Gold stocks were a clear drag on the session today.  

Asian markets were mixed, Japan & Hong Kong edged higher, China pulled back a touch while US Futures were trading lower for much of the day. 

The ASX 200 finished up +14pts / +0.21% to close at 6498. Dow Futures are trading down -88pts/-0.29%

ASX 200 Chart

ASX 200 Chart – Market short term overbought


Crown (CWN) +1.89%: A stock that’s been in MM’s sights for a while now, today we pressed the button and switched from Star (SGR) to Crown (CWN). CWN had been relatively weak for a few months thanks to an ongoing enquiry that cast some large grey shadows over their handing of a range of issues from Junkits to select shareholder briefings, all of which provided a near term headwind for the stock.  We’re certainly not downplaying the enquiry, there was some shocking aspects that came out, however share prices have a tendency to selloff into and during an event like this, before rallying out of it, the old saying of sell on rumour, buy on fact springs to mind. In MM’s view the performance differential was simply too much to ignore and we made the switch today, locking in profit from SGR and buying CWN.

Crown Resorts (CWN)

REA Group (REA) -0.54%: traded higher for most of the session though the market release at today’s AGM sent the stock into a spin. The market seemed hyped up for some positive comments today given the strong results the company posted at the 1st quarter update a little more than a week ago. At that stage EBITDA was tracking 8% better than 1Q20 highlighting the swift recovery in the property market, though cost cutting was the most significant contributor to the growth. Today’s CEO address was a little more cautious than that at the update. Melbourne volumes had flatlined in recent weeks after the sugar hit it received as the economy reopened and “COVID-19 continues to create market volatility” causing REA to defer any price hikes until at least July 2021. The property set up, much like the set up for equities, remains fairly strong - low rates and a less severe than expected move in unemployment should support asset prices.

REA Group (REA) Chart


·         AGL Energy Cut to Underperform at Macquarie; PT A$11.43

·         Oil Search Cut to Neutral at Macquarie; PT A$3.30

·         Mirvac Group Raised to Outperform at Macquarie; PT A$2.91

·         NAB Cut to Underweight at Morgan Stanley; PT A$20.10

·         Westpac Raised to Overweight at Morgan Stanley; PT A$20.40

·         OceanaGold GDRs Cut to Underperform at Macquarie

·         Evolution Cut to Underperform at Macquarie

·         Newcrest Cut to Underperform at Macquarie

·         ALS Cut to Underweight at JPMorgan; PT A$8.60

·         Adore Beauty Rated New Buy at Shaw and Partners; PT A$8.25

·         PolyNovo Cut to Sell at EL & C Baillieu; PT A$2.45


Growth portfolio: We switched from Star (SGR) to Crown (CWN) today

Major Movers Today

Have a great night

James, Harry & the Market Matters Team


Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday, or after the session when positions are traded.


All figures contained from sources believed to be accurate.  All prices stated are based on the last close price at the time of writing unless otherwise noted. Market Matters does not make any representation of warranty as to the accuracy of the figures or prices and disclaims any liability resulting from any inaccuracy. 

Reports and other documents published on this website and email (‘Reports’) are authored by Market Matters and the reports represent the views of Market Matters. The Market Matters Report is based on technical analysis of companies, commodities and the market in general. Technical analysis focuses on interpreting charts and other data to determine what the market sentiment about a particular financial product is, or will be. Unlike fundamental analysis, it does not involve a detailed review of the company’s financial position.

The Reports contain general, as opposed to personal, advice. That means they are prepared for multiple distributions without consideration of your investment objectives, financial situation and needs (‘Personal Circumstances’). Accordingly, any advice given is not a recommendation that a particular course of action is suitable for you and the advice is therefore not to be acted on as investment advice. You must assess whether or not any advice is appropriate for your Personal Circumstances before making any investment decisions. You can either make this assessment yourself, or if you require a personal recommendation, you can seek the assistance of a financial advisor.  Market Matters or its author(s) accepts no responsibility for any losses or damages resulting from decisions made from or because of information within this publication. Investing and trading in financial products are always risky, so you should do your own research before buying or selling a financial product.

The Reports are published by Market Matters in good faith based on the facts known to it at the time of their preparation and do not purport to contain all relevant information with respect to the financial products to which they relate. Although the Reports are based on information obtained from sources believed to be reliable, Market Matters does not make any representation or warranty that they are accurate, complete or up to date and Market Matters accepts no obligation to correct or update the information or opinions in the Reports. Market Matters may publish content sourced from external content providers.

If you rely on a Report, you do so at your own risk. Past performance is not an indication of future performance. Any projections are estimates only and may not be realised in the future. Except to the extent that liability under any law cannot be excluded, Market Matters disclaims liability for all loss or damage arising as a result of any opinion, advice, recommendation, representation or information expressly or impliedly published in or in relation to this report notwithstanding any error or omission including negligence.