ASX 200 Market Wrap: Big Four Bounce, FMG Surges, CSL Lags

The ASX 200 delivered its strongest session in three months on Thursday, boosted by a positive Wall Street lead and strong Nvidia earnings. Breadth improved sharply, the big four banks finally moved higher together, and Materials outperformed thanks to a strong showing from FMG. Still, while parts of the market look capable of extending the rebound, CSL’s continued weakness stands out as a risk signal.

 

View related analysis:

• ASX 200 Market Wrap: Fresh 7-Month Low for CBA, FMG Weathers the Storm
• ASX 200 Market Wrap: Tech, Financials Lead Selloff as Risk-Off Accelerates
• ASX 200 Market Outlook: Tech Rout Deepens, Financials Slide, ANZ Reverses
• ASX 200 Market Wrap: Fresh 7-Month Low for CBA, FMG Weathers the Storm

 

ASX 200 Rebound Led by Banks and Materials Stocks

ASX 200 Market Snapshot

• The ASX 200 rose 1.2% on Thursday — its best day in three months — helped by a strong Wall Street lead and upbeat Nvidia (NVDA) earnings.
• Breadth was solid: 143 ASX 200 stocks advanced, 45 declined and 12 were unchanged.
• CBA posted a minor bounce after holding above 150 earlier in the week, supporting the broader index.
• All big four banks finished higher, led by NAB (+1.4%) and Westpac (+1.1%).
• Nine of eleven ASX sectors rose, led by Materials (XMJ), Technology (XIJ) and Real Estate (XRE). Utilities (XUJ) and Energy (XEJ) were the only sectors to close lower.
• The rebound in Consumer Discretionary (XDJ) and Technology (XIJ) from oversold levels suggests the ASX bounce may have more room to run — even though my core bias remains for further downside.

Chart analysis by Matt Simpson - source: ASX, LSEG

 

NAB, WPC Leads Big Four Bounce

It’s healthier to see the big four banks finally rise in step with the ASX 200, even if the moves look corrective rather than trend-changing. Momentum can extend a little further, but I’m still watching for a swing high on all four and a return to their broader bearish trajectories.

• CBA held above its 20-month EMA as expected, lifting to 153 and helping stabilise the index.
• Westpac (WPC) held above its October low and printed a two-bar bullish reversal (bullish piercing line), opening the door for a retest of the 50-day EMA near 38 or a gap fill just below 39.
• National Australia Bank (NAB) led the majors, rising 1.4% after its decline held above 40.
• ANZ also formed a bullish piercing line, but directly into its 50-day EMA, flagging a potential near-term inflection point.

Chart analysis by Matt Simpson - Source: ASX, TradingView

 

 

Fortescue Ltd (FMG)

I highlighted FMG yesterday as one of the names most likely to outperform if the ASX 200 bounced — and it delivered. The 4.2% surge was its best session in four months, and the stock now sits less than a typical day’s range from a 17-month high. Given the strength of the rally into this zone and the broader uptrend behind it, a breakout looks more likely than not.

Chart analysis by Matt Simpson - Source: ASX, TradingView

 

 

CSL Technical Analysis

If a stock can’t rally when the broader market does, it usually signals weakness ahead — and that’s exactly the issue with CSL.

The CSL share price has dropped 44.9% from the July high, with roughly half of that fall occurring in under a month from the October peak. Price is consolidating in a tight range near cycle lows, but the bias remains lower given CSL’s inability to participate in Thursday’s ASX 200 rebound.

Bears will be eyeing the 160 handle, just above the November 2018 low, and with momentum slowly rebuilding inside this range, CSL looks vulnerable to another leg down.

Chart analysis by Matt Simpson - Source: ASX, TradingView

 

 

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-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge