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Navigating Market Trends: Understanding Technical Analysis on the ASX
In the realm of technical analysis, a well-known adage states, "The trend is your friend until it bends." However, many would argue that even when a trend begins to bend, it remains favourable, providing crucial insights into potential price shifts, helping investors manage their risk effectively. Failing to adjust your risk appetite upon noticing a trend shift can lead to significant losses, especially if the trend completely reverses.
A case in point is the group of stocks recently marked as ‘Feature Downtrends’. Prominent names include Pilbara Minerals (PLS), Iluka Resources (ILU), and Champion Iron (CIA). Investors who recognised early signs of these stocks’ downtrends have likely avoided substantial financial losses. The question remains, however: if you are still holding onto these stocks, what are you waiting for as the trend approaches its end?
Welcome to my ChartWatch Daily ASX Scans series, where I share scan lists informed by a trend-following technical analysis approach. My aim is to highlight the strongest uptrends and downtrends on the ASX for your consideration.
Utilising these lists may require a bit of finesse; some investors prefer to chase high-performing stocks, while others might opt for a more cautious approach, avoiding or short-selling those in decline. Ultimately, how you choose to act on this information is your own decision.
Bear in mind that many stocks will reappear in these lists multiple times as they continue to demonstrate the criteria set out in my analysis. However, it’s the investor’s responsibility to stay informed about changes in trends, as there are no automatic notifications for stocks that have dropped off the list.
Uptrends Scan List
| Company | Code | Last Price | 1mo % | 1yr % |
|---|---|---|---|---|
| AMA Group | AMA | $0.088 | +31.3% | +105.0% |
| AUB Group | AUB | $35.54 | +16.4% | +13.7% |
| Antipa Minerals | AZY | $0.550 | +2.8% | +400.0% |
| Commonwealth Bank of Australia | CBA | $171.36 | +8.4% | +42.9% |
| Computershare | CPU | $41.31 | +10.2% | +53.8% |
| Global X Defence Tech ETF | DTEC | $15.15 | +7.8% | 0% |
| Develop Global | DVP | $3.68 | +41.0% | +62.1% |
| Elsight | ELS | $0.560 | +41.8% | +55.6% |
| Inghams Group | ING | $3.88 | +17.9% | +0.3% |
| JB HI-FI | JBH | $104.17 | +7.1% | +81.6% |
| Magellan Infrastructure Fund ETF | MICH | $3.09 | +7.7% | +10.4% |
| REA Group | REA | $252.26 | +7.0% | +33.7% |
| SRG Global | SRG | $1.455 | +16.4% | +68.2% |
| The Lottery Corporation | TLC | $5.33 | +7.5% | +4.4% |
| Unibail-Rodamco-Westfield | URW | $6.85 | +13.2% | +7.9% |
| Wagners Holding Company | WGN | $2.15 | +33.5% | +147.1% |
Notable Uptrends
The stocks undergoing significant excess demand from today’s Uptrends List include AMA Group (ASX: AMA), AUB Group (ASX: AUB), REA Group (ASX: REA), SRG Global (ASX: SRG), Unibail-Rodamco-Westfield (ASX: URW), and Wagners Holding Company (ASX: WGN).
Downtrends Scan List
| Company | Code | Last Price | 1mo % | 1yr % |
|---|---|---|---|---|
| ANZ Group | ANZ | $28.40 | +2.8% | +2.6% |
| Avita Medical | AVH | $2.05 | -26.3% | -21.5% |
| Champion Iron | CIA | $4.41 | +3.3% | -39.1% |
| Coronado Global Resources | CRN | $0.170 | -27.7% | -84.9% |
| Cettire | CTT | $0.505 | -26.3% | -82.8% |
| Clarity Pharmaceuticals | CU6 | $2.18 | +19.1% | -43.2% |
| Clinuvel Pharmaceuticals | CUV | $10.63 | -1.2% | -29.5% |
| Domino’s Pizza Enterprises | DMP | $24.55 | -7.8% | -36.9% |
| IDP Education | IEL | $9.05 | +2.4% | -46.8% |
| Iluka Resources | ILU | $3.84 | +6.1% | -50.6% |
| IPD Group | IPG | $3.62 | -5.5% | -18.1% |
| Pilbara Minerals | PLS | $1.405 | 0% | -64.7% |
| Skycity Entertainment Group | SKC | $0.905 | -13.8% | -40.7% |
| Sovereign Metals | SVM | $0.625 | -13.2% | +21.4% |
| Weebit Nano | WBT | $1.700 | -0.6% | -29.2% |
| Wildcat Resources | WC8 | $0.160 | -13.5% | -71.4% |
Key Downtrends
From today’s Downtrends List, I’ve identified that stocks like Champion Iron (ASX: CIA), Coronado Global Resources (ASX: CRN), and Cettire (ASX: CTT) exhibit significant excess supply.
Conclusion
It’s important to note that the future of listed stocks remains unpredictable, and trends can change rapidly. This analysis serves as a guideline, not a recommendation. Understanding these trends fosters better investment decisions—however, always conduct your independent research before acting.
