Energy stocks continue to pump!!
Another tight range for the market today with the index +/- 24 points, a high of 5498, a low of 5474 and a close of 5479, up +4pts or +0.08%. Volume was good today – only about 3.6% below the 20-day average so things appear to be back to near enough to the norm….
Banks sold off from their highs while resources held their gains on the back of good overseas leads however the index overall came back a decent way from the intra-session highs – which has been the usual trend in the last few sessions. It seems clear the market is buying time – trying to stay at these levels but it’s struggling…losing momentum into the close each day. Sell into the morning strength seems to be the play from a short term trading perspective!
5400/5375 is the logical target if we are to pullback – which we think is likely. Markets rally, pullback then go again. It’s the typical flow!
ASX 200 Intra-Day Chart
ASX 200 daily chart
Energy, the key call at the moment as we’ve been highlighting for some time. WTI broke through $50 overnight and continues to look strong. Origin (ORG) up +4.14% today the standout and it accounts for 10% of the Market Matters portfolio while Santos (STO) and Oil Search (OSH) added more than 3% a piece. If oil rallies the ~$60 as we’ve been calling for a while, the Oil names will be substantially higher, and in the case of ORG, news yesterday that train 2 of the APLNG project is ahead of schedule bodes very well for our holding. APLNG has an Aussie dollar break-even point around $A60 and its trading well above that level which suggests that theybe producing a lot of free cash flow – well above what the market currently has built into their numbers.
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