The ASX200 dipped below 7000 points on Wednesday but rose back above that critical level on Thursday, to close at 7055. While US markets are at record highs, the ASX remains below its pre Covid peak reached in February 2020. The 7000 mark is well above the 2019 close, however, and clearly appears toppy to many nabtrade investors, who have been accumulating cash over recent months. Nabtrade’s two cash accounts peaked in February 2020, just prior to the Covid crash; once the market started falling, investors started enthusiastically buying favoured stocks, with buy trades outweighing sells 4:1 in March and April 2020. The market’s strong return since its lows have driven many investors to the sidelines, and cash has returned to its highs in recent weeks. This is characteristic of the relatively contrarian bent in the nabtrade investor base; most investors prefer to wait for price falls in their favourite stocks, and are reluctant to chase prices higher. Many will also take profits when prices are soaring, although this tends to vary at the individual stock level.

While many investors are reluctant to buy into the broader market at current levels, trading activity remains stable. Fortescue Metals (FMG) remains favoured, with strong buying on Thursday as the share price was down 1.3%. FMG remains well off its highs of over $26 reached in January. BHP (BHP), which is 10% off its highs, and Rio Tinto (RIO), less than 10% off, were sold off on small price increases.

Lynas Rare Earths (LYC), a familiar mid cap play for many investors, has had a poor week, down 14% in two days as news broke of substantial increases in Chinese rare earth production. This brought out the bargain hunters on nabtrade, who were happy to buy at a discount. The LYC share price is still up over 250% in twelve months, but was as high as $26.70 in 2011 when rare earth prices were at their peak. 

Commonwealth Bank (CBA) shares were sold off on Thursday on further share price appreciation; Westpac (WBC) was also a strong sell, while ANZ (ANZ) and nab (NAB) were a buy on small price increases. There was some buying in AMP (AMP) which reported its quarterly results, with assets under management rising on strong market returns, but outflows continuing. The share price fell nearly 3.5%, bringing out some contrarian investors.

In the energy sector, AGL (AGL) has been a buy on continuing weakness, with the share price down nearly 50% over twelve months. Santos (STO) is an entirely different story, a sell as prices are up over 70% over the last year.

On international markets, Coinbase (COIN.NAS) listed on the Nasdaq last week and continues to attract investors, despite considerable volatility. The COIN share price is down 18% since listing, in contrast with the blockbuster listings of recent years. Big names Tesla (TSLA.US), Microsoft (MSFT.US) and Palantir (PLTR.US) continue to dominate international trades, with investors largely continuing to accumulate. GameStop (GME.NYS) continues to attract interest. The Reddit crowd who vowed to HODL it forever drove the price from $3.77 to $483 in January; now trading at $158, the share price is up over 3000% year on year.