ASX 200 Bounces from Prior Support

• ASX recovered quite nicely during the Wednesday session.
  
• Risk appetite continues to be somewhat healthy across the globe.
  
• R commodity markets starting to perk up?

Australian equities have done fairly well Wednesday, after initially pulling back. At the beginning of the session, the ASX 200 fell to the AU$8350 level, an area that’s been important multiple times. However, we have seen a turnaround during the day to suggest that perhaps we are just simply staying in the same consolidation area that we have been in. This makes sense, as the index has been so bullish for so long, but it also has a history of being very noisy.

Commodities are a bit mixed during the session, but it does seem like they are leaning to the upside, and this has a major influence on the ASX 200 as well. Furthermore, the financials will continue to be a major driver, and a lot of this will come down to what kind of stimulus comes out of Asia, most specifically China. Remember, a lot of Australian banks finance major projects around the Asia/Pacific region.

BHP Group (BHP)

BHP Group had a reasonably bullish session, rising 0.41% as it hovers around the AU$42 level. This stock has been underperforming most of the year, and is down 3.23% over the last month, and over the last year is down 11.69%. This materials giant is poised to take advantage of inflationary headwinds though, because commodities typically rise when inflation is “sticky.” It’ll be interesting to see how that plays out, because inflation in the United States remains somewhat elevated, so BHP may find itself in a fairly decent spot. BHP has announced that one of its major copper producing mines has increased output by 22%, perhaps signaling that we are about to see commodities pick up.

Northern Star Resources Limited (NSL)

Northern Star Resources rallied 18c during the trading session, to reach the $16.93 level. The materials stock is up 0.83% for the month, and a whopping 37.42% for the last 12 months. It’s worth noting that the stock touched the 50 Day EMA during the trading session, before bouncing. It does look like we are seeing volume pick up just a bit in this consolidation area between the AU$15.75 level in the bottom, and the AU$18.50 level in the top. There is also a trend line cutting through this at the same time. The market seem to be digesting a lot of the gains from earlier in the year, so the recent action is not much of a surprise.

Qantas Airways Limited (QAN)

Qantas Airways dropped 1.44% during the session on Wednesday, as the Australian icon continues to find quite a bit of volatility in its trading. That being said though, it is worth noting that QAN has rallied a whopping 62.04% over the last 12 months, and even has rallied 5.21% over the last 30 days. In other words, this is a company that has been exploding to the upside, as it takes flight. It’s also worth noting that they have announced that they are almost ready to replace all of the Boeing 737 jets in their fleet with Airbus A321XLR models as they enter the final assembly line. This should increase efficiency, which of course is something that investors have liked.

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