Afternoon Report / Resources lead ASX down the chute (SUL, BHP)

By Market Matters 26 November 18

Resources lead ASX down the chute (SUL, BHP)

Market Matters Afternoon Report 26th November 2018


A choppy session for Aussie stocks today , the banks again doing their best to support the index however it wasn’t enough to offset the big sell off amongst the resource names - Iron Ore traded limit down during the Asian session. Iron Ore stocks the worst hit – RIO down 3.56% at $74.05, Fortescue (FMG) fell nearly 4% to $3.85 while BHP ended the session down 3.55% at $30.43 and now looks odds on to trade down below our $30 price target. 

Clearly, resource stocks are momentum plays and as momentum has come out of global growth expectations resources (as a proxy for growth) have been steamrolled. Interesting to look around Asia today with the emerging markets actually doing well. If we see continued divergence between emerging markets and our resource stocks, we’ll likely sell our Emerging Markets ETF to fund buying into the resource names…BHP ~$29.50 would look interesting…

Overall, the ASX 200 closed down -44 points or -0.78% to 5671. Dow Futures are currently up  +120 points or +0.49%.

ASX 200 Chart

ASX 200 Chart


Broker Moves;  Super Retail Group (SUL) saw some love today after a UBS upgrade – the bank calling it a BUY with a $8.65 price target versus todays $7.52 close…$9.16 is the average 12 month PT on the stock.


·         Accent Group Upgraded to Add at Morgans Financial; PT A$1.46

·         Bluescope Upgraded to Neutral at Citi; PT A$14

·         Bapcor Upgraded to Buy at UBS; PT A$7.05

·         Breville Downgraded to Sell at UBS; PT A$11.20

·         Premier Investments Upgraded to Buy at UBS; PT A$19.80

·         Woolworths Group Upgraded to Buy at UBS; PT A$31.25

·         Super Retail Upgraded to Buy at UBS; PT A$8.65

·         Myer Downgraded to Sell at UBS; PT A$0.38

·         Ainsworth Game Cut to Underperform at Macquarie; PT A$0.75

·         Vocus Upgraded to Hold at Morningstar

·         Cochlear Downgraded to Hold at Morningstar

·         Janus Henderson GDRs Cut to Equal-weight at Morgan Stanley

Commodities; As touched on above, commodities were hit hard today with BHP now trading down ~14% from its recent highs…We’re looking at BHP as a BUY around $29.50 – the chart highlights how out of favour the commodity trade is at the moment.

BHP Chart


No changes 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.  Market Matters does not make any representation of warranty as to the accuracy of the figures and disclaims any liability resulting from any inaccuracy.  Prices as at 26/11/2018

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 MarketMatters 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.