30 March 2024
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What stocks are investors buying and selling?

Gemma Dale
21 May 2021

After heavy falls on Wall Street led to a fall of nearly 2% on the ASX on Wednesday, falling below 7000 points and recording its worst day since February, it bounced back on Thursday, with the ASX200 closing above 7000 point and adding around 0.6% in value. Inflation fears and roiling crypto markets continue to put pressure on US tech stocks that have led the rebound since Covid first hit over a year ago; Australia’s tech darlings have been hit hard, with some of the most popular names down more than 50% this year.

Nabtrade investors continue to favour Fortescue Metals (FMG) as iron ore prices remain at extremely elevated levels. Nab’s Head of Commodities Research Lachlan Shaw has spoken about the extraordinary demand and supply pressures driving the price of iron ore, including huge infrastructure spend across the Northern Hemisphere and constrained supply following the tailings dam collapse at Brazil’s Vale mine in 2019. He suggests that significant new supply will come online in 2022, driving prices lower; Australian Treasury estimates price iron ore at just $US55, in stark contrast to current levels. Despite this, nabtrade investors continue to have a buy bias on FMG, with further buying in BHP (BHP) and mixed trading in Rio Tinto (RIO).

Weakness in Australia’s tech names has presented optimistic investors with a buying opportunity. EML Payments (EML) fell nearly 50% on Wednesday following the company’s announcement that one of its Irish could face regulatory issues, bouncing back nearly 4% on Thursday. Nabtrade investors were buyers at around $3 on Wednesday, and bought up again on Thursday around $3.06. Appen (APX) had been trading at 12-month lows last week, on investor concerns about sales weakness, but the announcement of a new structure and a favourably received investor day presentation saw it up nearly 15% on Wednesday, and a further 5% on Thursday. Trading in APX has been mixed with a slight buy bias. The price remains down over 50% over 12 months. Trading around $85 on Wednesday, Afterpay (APT) saw large buys against a number of smaller sell orders; trading above $91 on Thursday it was sold down overall. Xero (XRO) fell heavily last week on missed estimates, but has recovered somewhat and remains a buy on nabtrade.

Many investors have chosen to take a broad approach to recent market moves, with significant trading in Vanguard’s Australian Shares Index ETF (VAS), Betashares Australian Equities Strong Bear Hedge Fund (BBOZ) and Betashares Geared Australian Equity Fund (GEAR). The overall index (VAS) was a strong buy on Wednesday when the ASX200 was falling. BBOZ allows investors to benefit when the market is falling, and was a top 20 buy on Thursday; GEAR allows investors to magnify their gains if the market is rising, and was a sell. To see all three of these products in the most traded instruments is highly unusual.

On international markets, investors were back to buying Telsa (TSLA.US) on weakness, while recently IPO-d crypto trading platform Coinbase (COIN.US) was also buy. In keeping with the weakness on crypto markets, Coinbase has fallen 41% since its listing.

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