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Three energy stocks to watch: March 6th, 2023


MongiIG

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Last week, the ASX 200 fell -0.32% to close at 7282, locking in four straight weeks of falls in February; this week we review the recent news and charts of three ASX-listed energy stocks for an overview of what comes next.

 

bg_iron_ore_mining_gettyimages_868702536Source: Bloomberg

 
 Tony Sycamore | Market Analyst, Australia | Publication date: Monday 06 March 2023 

ASX 200 overview

Last week, the ASX 200 fell -0.32% to close at 7282, locking in four straight weeks of falls in February. At a sector level, the Real Estate (-3.4%) and Financials (-2.8%) sectors underperformed while the Energy (6.1%) and Materials (4.3%) sectors outperformed.

The sectors were supported by upside surprises in China's PMI data which revived the country's re-opened trade market after it flagged in February.

Returning to the index, the ASX 200's weakness in February coincided with a disappointing earnings season and the RBA's hawkish shift at its February Board Meeting. Ironically, since the RBA's February Board Meeting, some preliminary signs have emerged that the economy is cooling, including softer wages, GDP, and unemployment data.

In this week's Three Stocks to Watch, we review the recent news and charts of three ASX-listed energy stocks for an overview of what comes next.

  • Woodside Energy Group (WDS)

Last week, Woodside Energy reported that its full-year underlying earnings more than tripled from $1.6 billion in FY 2021 to $5.2 billion in 2022. The massive jump in earnings resulted from elevated energy prices that followed the Russian invasion of Ukraine and the Woodside merger with BHP's petroleum business last year.

Woodside Energy earnings reported its share price surged an extraordinary 9.2% to close at $37.79. However, with energy prices, including oil and liquefied natural gas (LNG), easing following the end of the European winter, there are fears that the 2022 earnings bonanza may be a hard act to follow.

While below the horizontal resistance $38.00/20 area, the share price of Woodside will likely remain in the range bound between $38.00 and uptrend support just ahead of $34.00. A fresh catalyst will be needed to break its $39.58 high from November last year.

Woodside daily chart

 

WDS_2023-03-06_13-30-36.pngSource: TradingView

  • Origin Energy (ORG)

The share price of Origin Energy added 7% in February after the Brookfield-led consortium hoping to buy Origin returned with a new offer of $8.90 a share. The latest bid ended fears that the consortium had turned cold on the deal after the Australian Government intervened to cap prices in the domestic gas market in December.

Technically, the Origin chart appears bullish and suggests a retest and break of the November $8.15 high. However, keep in mind that the Brookfield takeover offer cannot proceed until recieving approval from the Australian Competition and Consumer Commission and the Foreign Investment Review Board.

Origin daily chart

 

ORG_2023-03-06_13-34-28.pngSource: TradingView

  • Santos (STO)

Last month, Santos, Australia's largest natural gas supplier, announced that its full-year 2022 profit increased by 221% to US $2.1 billion as gas prices surged following the Russian invasion of Ukraine.

As viewed in the chart below, the share price of Santos has been well supported over the past 12 months, near $6.75. Providing this support level continues to hold, the share price of Santos can extend its run higher in the coming months towards the downtrend resistance coming in around $7.50 from the June 2022 $8.86 high.

Santos daily chart

 

 

STO_2023-03-06_13-52-47.pngSource: TradingView

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