ASX200 Afternoon Report July 21st 2022

The ASX200 trades 9 points higher at 6768 at 2.45 pm Sydney time.

The local market is in consolidation mode today after adding over 100 points yesterday and ahead of a considerable amount of event risk in Europe this evening.

At a time when it is least needed, Italian political drama has forced its way back into the spotlight. The Italian government sits on the brink of collapse after three of Italian PM Draghi’s partners withdrew support following a confidence vote.

In Germany, the ECB meets tonight and is expected to start a rate hiking cycle attempting to walk the tightrope between high inflation and stalling growth.

Nonetheless, the high beta tech sector has again been the day’s best performer, led by Link Administration up 12.25% to $4.45 after Canadian suitor Dye and Durham returned with a revised takeover offer.

Novonix added 8.97% to $2.43, Afterpay owner Block added 5.2% to $105.51, Sezzle added 4.65% to $0.23c, and Zip added 4.5% to $0.69c after reporting a solid increase in revenue and after the CEO stated that abandoning the merger with Sezzle would hasten the company’s push towards profitability.

Healthcare stocks have made gains, led by Telix Pharmaceuticals, which added 16% to $6.47 after a solid Q2 trading update. Pro Medicus added 3.2% to $49.97, Fisher and Paykel added 2.1% to $19.48, and Sonic Healthcare added 1.9% to $34.27.

The ASX Financial Sector has rebounded above the critical 6000 level it broke down from in early June, supported by a rebound in the U.S. banking sector and gains in the big banks’ share prices. Westpac added 1.1% to $20.76, CBA added 1% to $96.96, and ANZ added 0.25% to $21.66 after its three-day trading halt as it completed its capital raise to buy Suncorp. NAB added 0.2% to $29.71. Suncorp fell 2.3% to $11.05.

A sea of red for Material stocks as commodity prices remain hostage to China’s latest Covid outbreak and slow down fears. Whitehaven coal fell 4% to $7.17, Yancoal fell 3.85% to $5.76, Coronado Coal fell 2.27% to $1.62, and New Hope coal fell 1% to $4.43.

The iron ore miners were also under pressure as Rio Tinto fell 3.45% to $94.43, FMG fell 2.63% to $17.43, and BHP fell 1.86% to $36.43

A disappointing production report from Woodside has weighed on the Energy sector as it fell 5% to $30.95, Beach Energy fell 1.9% to $1.79, Strike Energy fell 1.8% to $0.27c, and Santos has fallen 1.5% to $7.28 despite reporting an 85% rise in sales revenue in the first half of 2022.

Turning to the charts, the ASX200 is testing the bottom of a medium-term resistance band between 6750/6950 that it needs to recover above to negate the technical damage caused by the breakdown in June. Until this occurs, the rally from the 6407 low is viewed as a bear market rally.

Source Tradingview. The figures stated are as of July 21st, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

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The ASX200 trades 9 points higher at 6768 at 2.45 pm Sydney time.

The local market is in consolidation mode today after adding over 100 points yesterday and ahead of a considerable amount of event risk in Europe this evening.

At a time when it is least needed, Italian political drama has forced its way back into the spotlight. The Italian government sits on the brink of collapse after three of Italian PM Draghi’s partners withdrew support following a confidence vote.

In Germany, the ECB meets tonight and is expected to start a rate hiking cycle attempting to walk the tightrope between high inflation and stalling growth.

Nonetheless, the high beta tech sector has again been the day’s best performer, led by Link Administration up 12.25% to $4.45 after Canadian suitor Dye and Durham returned with a revised takeover offer.

Novonix added 8.97% to $2.43, Afterpay owner Block added 5.2% to $105.51, Sezzle added 4.65% to $0.23c, and Zip added 4.5% to $0.69c after reporting a solid increase in revenue and after the CEO stated that abandoning the merger with Sezzle would hasten the company’s push towards profitability.

Healthcare stocks have made gains, led by Telix Pharmaceuticals, which added 16% to $6.47 after a solid Q2 trading update. Pro Medicus added 3.2% to $49.97, Fisher and Paykel added 2.1% to $19.48, and Sonic Healthcare added 1.9% to $34.27.

The ASX Financial Sector has rebounded above the critical 6000 level it broke down from in early June, supported by a rebound in the U.S. banking sector and gains in the big banks’ share prices. Westpac added 1.1% to $20.76, CBA added 1% to $96.96, and ANZ added 0.25% to $21.66 after its three-day trading halt as it completed its capital raise to buy Suncorp. NAB added 0.2% to $29.71. Suncorp fell 2.3% to $11.05.

A sea of red for Material stocks as commodity prices remain hostage to China’s latest Covid outbreak and slow down fears. Whitehaven coal fell 4% to $7.17, Yancoal fell 3.85% to $5.76, Coronado Coal fell 2.27% to $1.62, and New Hope coal fell 1% to $4.43.

The iron ore miners were also under pressure as Rio Tinto fell 3.45% to $94.43, FMG fell 2.63% to $17.43, and BHP fell 1.86% to $36.43

A disappointing production report from Woodside has weighed on the Energy sector as it fell 5% to $30.95, Beach Energy fell 1.9% to $1.79, Strike Energy fell 1.8% to $0.27c, and Santos has fallen 1.5% to $7.28 despite reporting an 85% rise in sales revenue in the first half of 2022.

Turning to the charts, the ASX200 is testing the bottom of a medium-term resistance band between 6750/6950 that it needs to recover above to negate the technical damage caused by the breakdown in June. Until this occurs, the rally from the 6407 low is viewed as a bear market rally.

Source Tradingview. The figures stated are as of July 21st, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

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3. Choose your position and size, and your stop and limit levels.
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