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 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

View the full economic calendar

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

How to trade with City Index

You can trade with City Index by following these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the market you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.