ASX 200 Continues to Find Buyers on Dips

• ASX 200 shows signs of resiliency late on Monday.
• Materials and miners provide a boost.
• Global growth concerns continue to cap the upside.

During the Monday session, Australian stocks initially pulled back during the early hours, only to turn around and firm up, partially because of the mining sector strengthening. When you look at the chart from a longer-term perspective, the ASX 200 continues to find plenty of support near the 50 Day EMA, and therefore I think it makes a certain amount of sense that we would see continuation, but it’s obvious that a lot of traders continue to look at this market through the prism of a slow and gentle grind, as it has been over the last month or so.

There are a lot of questions about the global economy, which of course has a direct influence on Australia itself. Furthermore, we have the US elections which seem to be taking the headlines of a lot of financial publications, and it does of course have somewhat of an influence on Australia, albeit indirectly via the US/Chinese relations.

Source: TradingView, ASX 200 Chart, 29 October 2024 

HBHP Group Ltd (BHP)

BHP rallied rather significantly on Monday, gaining 1.35%. However, it’s worth noting that the last month has seen a 3.98% decline, and the last 12 months has seen BHP lose 4.66%. The materials giant will continue to be a major influence on the index, and as it has been a bit of a laggard, it does slow down the overall ASX 200.

With the $31.7 billion settlement agreement over the Samarco Dam failure, it does clear some of the overhang from BHP, and therefore it’s likely that the market is breathing a bit of a “sigh of relief.” From a technical analysis standpoint, the market is currently threatening the 200 Day EMA, so technicians will be watching closely.

Source: TradingView, BHP Chart, 29 October 2024

RIO Tinto Ltd (RIO)

RIO Tinto rallied 1.73%, although it has seen a lot of ugly behaviour over the last month, as it has lost 5.75%. Over the last 12 months, RIO Tinto is up 2.03%, but it does look as if it’s trying to turn things around. With potential demand coming out of China, or perhaps US sanctions under a Trump administration, RIO could be a bit noisy. Further complicating things, there has been a fatality at the Simandou Project in Guinea. Because of this, and the fact that the stock finds itself at the crucial 200 Day EMA could continue to see a lot of push and pull in this market.

It is worth noting that traders have been particularly defensive above the AU$117.50 level, as it has bounced off a couple of times. This doesn’t necessarily mean the market has to hold up, just that there is obviously some type of interest there.

Source: TradingView, RIO Chart, 29 October 2024 

Fortesque Ltd (FMG)

Foretesque rallied 2.21% during the trading session, although it’s worth noting that it is down 3.43% for the month, and down 12.76% over the last 12 months. While it does look from a technical analysis standpoint that it is trying to hold its own at the AU$18.75 level, it’s worth noting that Jarden recently downgraded the stock to “underweight”, and that has put a little bit of an overhang on this stock.

With a dividend of AU$0.89, there is a little bit of value to holding this stock, and perhaps longer term traders are trying to build a little bit of a base in this area, but volume has dropped a bit, and therefore this looks like consolidation before some type of bigger move. Being stuck between the 50 Day EMA and the 200 Day EMA indicators can also have a bit of a stifling effect as well.

Source: TradingView, FMG Chart, 29 October 2024

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