ASX200 outlook: top three stocks to watch this week

Market wrap: ASX200 a relative safe haven as Ukraine invasion keeps volatility elevated.

The Russian attack on Ukraine intensified over the past week and that’s keeping sentiment in global markets weak. Despite this, the ASX200 is proving to be something of a safe harbour amidst the storm, with surging commodity prices driven by sanctions and production disruption, shaping as a boon to the profits of energy and materials companies. Of course, it’s a mixed story across the market with plenty of losers too. The expected hit to global growth is a major risk to revenues for industrial companies while increased inflationary pressures and the risk of higher interest rates have hit growth stocks like those in the tech sector.

Top three ASX stocks to watch

Here are three stocks that have caught our eye and may be worth watching in the week ahead.

1. Flight Centre Travel Group Ltd (FLT)

Travel stocks can’t catch a break. After years of lockdowns and local and international travel restrictions, the war in eastern Europe is just the latest event that will damage travel demand. Flight Centre shares have ridden the turbulence the whole way, with a false break above trend channel resistance seeing price approach a re-test of trend channel support. The stock remains in a primary uptrend now, however, with price below the major daily MAs, risk in the short-term appears skewed to the downside. A break-down of the trend channel could bring support at $14.00 into view, while near-term resistance is around $21.30.

2. OZ Minerals Ltd (OZN)

For those wanting both gold and copper exposure, OzMinerals offers a play on both. The increase in gold prices, driven by diving real yields and a push into alternative stores of value because of sanctions on Russia, has pushed the yellow metal towards $US2000 per ounce. This week, copper seems to have broken out of a consolidation pattern due to the expectation of global supply disruptions and rapacious Chinese demand – not to mention the secular environmental and electric vehicle narrative. OzMineral’s price is carving out a pattern of higher-highs and higher-lows, with current support around $26.80 and major resistance at the stock’s previous highs $29.70.

3. Paladin Energy Ltd (PDN)

The investment case for uranium stocks has become complex because of the invasion of Ukraine. On the one hand, the energy crisis, amidst the secular push away from fossil fuels, has put nuclear back into focus as a possible alternative form of energy. On the other, the hot rhetoric from Russia about using nuclear weapons, not to mention their attacks on power plants in Ukraine during the conflict, has raised strategic, environmental questions about its viability. Paladin shares have dropped because of the conflict, however, the stock appears, for now, in a broader uptrend, with price carving out a continuation on the charts.

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