Australian Stocks Continue to Consolidate Overall

• Markets mixed worldwide, ASX 200 no different.  

• Asian demand continues to be a question for materials sector.  

• New York could set the tone on Tuesday.  

The ASX 200 is an index that has been in some form of consolidation over the last few months, and the Monday session was more of the same. It should be noted that the candle for the session is positive, and has challenged the AU$8300 level, a short-term level that has been important a few times already. With this, the market seemingly is still simply looking for a reason to go higher, as the pullbacks continue to see buyers on dips, as seen near the $AU8100 level.  

BHP Group (BHP)  

BHP had a solid day Monday, gaining 0.72% from the open. A gain of AU$0.29 for the session wasn’t overly remarkable, but it does send a signal that traders are paying close attention to the AU$40 level. Underneath there, previous support has been seen at the AU$38.75 level as well. The materials giant of course remains on its back foot though, as it has lost well over 6% in the last month. With that being said, longer-term traders will be paying close attention to volume in this area, perhaps signalling some type of bottoming pattern. Value hunters almost certainly watch this one closely.  

Goodman Group (GMG)  

Goodman Group lost a touch over 1% during the session, dropping back from the crucial AU$38 level. The AU$38 level has been like a brick wall for the market over the last several weeks and is clearly an area where people will be paying close attention. For what it is worth, the REIT has been rather quiet as far as volume is concerned, so this may be a situation where the market simply is more of a “buy on the dips” type of scenario, at least until there is some type of fundamental reason for Goodman to rally. If the market were to break down below the AU$35 level, then it could change the overall attitude of the market to a negative tone. As things stand right now though, this is a market that looks very sideways.  

Insurance Australia Group (IAG)  

Insurance Australia Group has been a strong performer during the session on Monday, gaining 1.13% to close at AU$8.07 for the day. The insurance giant has recently broken to a fresh, new high, hurtling above the AU$8 level. The candlestick for the Monday session is rather robust, so it does suggest that perhaps traders are starting to become a little bit more aggressive. It is worth noting that IAG is an insurance company, so this could be traders trying to play a little bit of defense in a market that seemingly doesn’t know what it wants to do at the moment.  

Regardless, this has been a very strong uptrend for a while, and the latest move seems as if it is a continuation and an affirmation of what the market had thought previously. After all, the stock is up 37.71% over the last year, which is obviously a massive move higher. There is nothing in the technical analysis that disputes the momentum play either, so both fundamental and technical traders will be interested. It further helps the cause for Insurance Australia Group that there is a dividend that is a bit over 2% at the moment.  

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