Tech stocks give back some recent gains (WHC)
WHAT MATTERED TODAY
Another day that saw the market chop around in a tight range, weakness bought, strength sold, and we remain around the midpoint of the 6200/5700 trading range that has held stocks at bay for over a month now. My gut feel is that we’re close to a breakout and given the market’s resilience in the face of bad news we favour the upside however things are neutral at the index level for now.
There’s some big moves playing out at the stock level though, Openpay (OPY) continues to see big flows on a daily basis, today it traded 27m shares valued at $120m, there’s only 81m shares on issue! Clearly there’s hot money here, and the stock could do anything, for now it’s showing resilience. Closed up +8.64% today at $4.40.
At a sector level today, IT was sold off following weakness in the tech stocks overnight - growing lockdowns in California, the home of many tech companies to blame. That flowed through to weakness locally with the sector down 4% on the session to be the biggest drag.
Asian markets were all lower today, even China fell back from recent highs while US Futures remained resilient during our time zone, trading marginally higher.
Overall, the ASX 200 fell -36pts / -0.61% to close at 5941. Dow Futures are trading up +136pts / 0.52%
ASX 200 Chart
ASX 200 Chart
CATCHING MY EYE:
Portfolio Moves: We made some amendments to the MM Growth Portfolio today and I’ve discussed these in a quick podcast below.
Whitehaven Coal (WHC) +4.11%: finally saw some love today after being one of the serial underperformers as the market rallied, Whitehaven was bid strongly on the back of an impressive quarterly that saw production hit guidance for the full year. The final quarter of the year saw the Maules Creek mine hit a record and Narrabri finishing the year fast as it sets up for an even better FY21.
It’s been a messy 12 months for the coal miner, after some management changes at the back end of last year, and poor production rates in the March quarter the market was rightfully concerned that the June quarter would also disappoint. Concerns still remain around sales with a number of clients refusing shipments as the COVID shutdown hit demand for coal – stocks jumped 20% on last year. If the rebound in demand for other commodities is anything to go by, thermal coal will soon be back in favour and Whitehaven should start to move higher. Operationally they look in good shape which hasn’t been said of Whitehaven in some time. For those interested, I was also on Ausbiz this morning before market ope, and talked about Whitehaven – click here
Whitehaven Coal (WHC) Chart
BROKER MOVES:
· Webcentral Grp Ltd Raised to Hold at Bell Potter
· Technology One Raised to Buy at Bell Potter; PT A$9.50
· Breville Rated New Overweight at Morgan Stanley; PT A$28
OUR CALLS
We made some amendments to the MM Growth portfolio today, selling Ramsay Healthcare (RHC) given the rising case count in Victoria and threat of wider lockdowns (and subsequent reduction in elective surgery), we also trimmed Xero (XRO), added to Alumina (AWC) and bought a small position in Z1P
Major Movers Today
Have a great night
James, Harry & the Market Matters Team
Disclosure
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