ASX200 Marked Lower on Apparent Lack of Buying
The market opened marginally lower and within an hour, it had plunged around 50-points / 1%, while the selling was evident there was not significant volume changing hands. However, with both the banks and resources falling well over 1% it’s very hard for our market to perform with these heavyweights being under pressure. The market managed to hold its ground from lunch time, but the damage was done and we closed 38 points lower, or -0.65%, at 5752 with a high of 5790, a low of 5739 and a range of +/- 51.
Unfortunately the Australian market feels in the “glass is half empty mode”, as it ignores positive leads from overseas and when they dare to fall, like some of Asia today, we simply get belted. The May-June seasonal weakness continues to play out as we anticipated with our 5600 target area now only ~2.5% away.
ASX200 Intra-day Chart
Even with US indices hitting all-time highs last night, today’s descent actually made new 4-day lows for local stocks and a break back under the low for May at 5697 remains our preferred scenario, especially as we only see a little more upside from overseas markets before they experience a minor pullback.
ASX200 Daily Chart
Three stocks caught our eye amongst the general weakness:
1. Ansell (ANN), a stock that has looked after MM on more than one occasion over the years was smacked $1.73, almost 7%, following yesterday’s news of it selling its condom division for $800m and a future buyback. We have now put the stock in the leave alone basket.
Ansell (ANN) Weekly Chart
2. Fortescue (FMG) was smacked 22c, back well under the psychological $5 area. We believe the stock is an excellent short-term buy ~$4.50.
Fortescue Metals (FMG) Weekly Chart
3. Regis Resources (RRL) rallied ~2% to close at $3.20. We are keen to buy RRL and are aware that it made fresh recent lows under $3.08 this week, but then bounced back. While we will remain patient for now, RRL is very much on our radar.
Regis Resources (RRL) Weekly Chart
Have a great night and watch for the weekend report,
The Market Matters Team
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