ASX: three stocks to watch
As we enter the second week of trading for 2023, Tony Sycamore explores three stocks to watch.
ASX 200 overview
In its first week of trading for 2023, the ASX 200 added 71 points (1.01%) to close at 7110. A respectable performance after a violent sell-off rocked the market on the first day of the New Year (Tuesday).
It’s not uncommon for market moves to be exaggerated during the first week of the New Year with many traders still on holiday and volumes light. The stunning reversal higher that followed during the remainder of the week, led by the heavyweight Materials Sector (+3.03%), keeps the uptrend in the ASX 200 index intact.
At a sector level, the Materials Sector is well placed to take advantage of an expected rebound in China’s growth in the second half of 2023 following its recent re-opening. Support will also come from the Chinese government’s stabilisation of its property sector and higher commodity prices, including iron ore which climbed 2.4% on Friday to $119.75 p/t.
In the article below, we look at three ASX Materials Stocks which need no introduction and appear to have broken higher, supported by the tailwinds noted above.
-
BHP
BHP soared by 4.12% last week, and its share price is now up over 30% from its October 2022 $36.93 low. This week it has opened above the trendline resistance at $47.70, from the July 2021 high of $48.57.
Presuming BHP can maintain the break above $47.70 and then takeout July 2021's $48.57 high, it opens up a test of the next upside resistance level at $50.00, before $52.00.
BHP weekly chart
-
Rio Tinto
The share price of Rio Tinto climbed by 2.77% last week, and its share price is now up over 38% from its October 2022 $87.81 low. This week's early trading appears to have confirmed last week’s break above the trendline resistance at $117.00, drawn from the July 2021 high of $137.33.
Presuming Rio Tinto can maintain an altitude above $117.00 and iron ore holds onto its recent gains, look for the share price of Rio Tinto to test the next upside resistance level at $128.55, coming from the March 2022 high.
Rio Tinto daily chart
-
Fortescue Metals
The share price of Fortescue soared by 6.29% last week, and its share price is up over 30% from its November $$14.50 low.
In early trading this week, the share price has fallen over 2.8% from its Monday morning high of $22.15 following news of the resignation of FMG's long-serving Chief Financial Officer, Ian Wells. Nonetheless, the share price of FMG remains above the trendline resistance at $21.50, drawn from the July 2021 high of $26.58.
Providing FMG can hold above support near $20.00, and iron ore holds onto its recent gains, look for the share price of FMG to test the next upside resistance level at $22.99, coming from the February 2022 high.
Fortescue Metals daily chart
Take your position on over 16,000 local and international shares via CFDs – and trade it all seamlessly from the one account. Learn more about trading share CFDs with us, or open an account to get started today.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
