Why ASX Agricultural Stocks Are Showing Relative Strength While the Market Falls: The Oil Shock Playbook Explained

When every major index breaks key technical levels simultaneously, the instinct is to focus on what is falling. Experienced momentum traders know the more important question is: what isn't falling? In a recorded market analysis session on 10 March 2026, Gary Glover (AR 259215), Authorised Representative of Novus Capital Limited (AFSL 238 168), identified two sectors showing unexpected relative strength on the ASX — agricultural stocks and selected discretionary retailers — at precisely the moment most traders are avoiding them. The explanation lies in a well-documented historical sequence known as the oil shock playbook.

Watch Gary Glover (AR 259215), Authorised Representative of Novus Capital Limited, walk through the oil shock playbook and identify two ASX sectors showing unexpected relative strength during the March 2026 market selloff.The week of 10 March 2026 marked a significant technical deterioration across all major indices. The NASDAQ broke below its 50-week moving average — a level Gary Glover identifies as historically critical for momentum-based markets. "For people who trade momentum stocks, they usually want to be above the 50-day moving average and they want to be out if it's below," he explained during the session. "If it's cracked below the 50, we've normally gone on and had a larger fall."

The NASDAQ's first visible support sits just below 20,000 — the previous breakout high from late 2024 and early 2025. The S&P 500 mirrors this structure, with the early 2025 high at approximately 6,140 becoming the first meaningful support zone. On the ASX, the XJO has printed a textbook false break: a marginal new high followed by a decline that surpassed the November 2024 swing low.

Despite this, the ASX 200 is holding up relatively well. As Gary noted, "The Aussie market is actually showing a little bit more strength than the US market" — a divergence he attributes to Australia's commodity-heavy index structure, with oil above $100 per barrel providing a tailwind to domestic energy and resources names.

This context matters because it creates the conditions for relative strength hunting. As Gary put it plainly: "It is a tricky market, but potentially it's a traders' type of market." For a broader picture of where the ASX stands in this environment, see 18-Month Market Low: 80% of Traders Are Losing Money — But the Top 30 ASX Momentum List Still Shows Where the Diamonds Are.

Why Do Rising Oil Prices Eventually Push Up Food Costs — and What Does That Mean for ASX Investors?

The connection between oil prices and agricultural stocks is not immediate, but it follows a logical and historically documented sequence. Gary Glover walked through the chain step by step. "The playbook there post that sort of oil shock is that normally oil and gas sector is first — the food space is sort of number two," he explained.

The mechanism is straightforward. Sustained oil prices above $100 per barrel push up diesel, transportation and fertiliser costs across the entire agricultural supply chain. Shipping disruptions — in the current environment, a closed shipping canal — compound supply constraints further. Farmers respond rationally by planting smaller crops, which reduces supply precisely when input costs are already elevated.

"If everyone's doing smaller crops and spending less because all the import costs have gone up," Gary noted, "then there's going to be less supply coming on board — and the market will look ahead a little bit there."

The equity market does not wait for the supply shortage to arrive. It prices the expectation ahead of it. Gary observed the pattern already emerging: "I noticed last week the agricultural stocks in the US were one of the stronger segments in that pretty weak market — and our ag stocks actually seem to be catching a little bit of a break as well."

This is not speculation. It is a replay of a pattern that has appeared in historical oil shock periods. For a deeper understanding of how oil price shocks cascade through Australian equity markets phase by phase, see our dedicated analysis: How Professional Traders React to Oil Price Shocks: The 3-Phase ASX Playbook.

Which ASX Agricultural Stocks Are Showing Relative Strength in the Current Market Selloff?

Gary Glover identified three agricultural stocks displaying relative strength characteristics in his 10 March session, alongside one speculative watch with important caveats.

Elders Limited (ELD.ASX) is the largest-cap agricultural stock on the ASX and, as Gary notes, the natural first candidate when assessing sector leadership. "You often want to trade the leader as they say — that's probably the least amount of risk there," he observed. What makes the chart particularly interesting is a failed breakdown. ELD broke below a tightening pattern approximately three weeks prior to the session date, then reversed sharply back into the setup — a signal Gary reads as a bullish false break. "If you break a pretty negative setup and then switch back the other way, that's normally a sign that it's not going to move in that direction. I just normally when I see that, it means it's going to punch out the other side." He characterised this as an application of the Wyckoff throwback concept and described it as a constructive setup given the sector rationale behind it.

GrainCorp (GNC.ASX) has recorded six consecutive weeks of upward price action on rising volume while the broader market has been selling off — a pattern Gary reads as a potential accumulation signal. He flagged that he would want to see a controlled pullback before acting: "I'd love to see a little bit of counter move on that one — I kind of want to see the first retreat and see if it holds." GrainCorp has direct exposure to grain handling and export, and sits within the thematic Gary is watching most closely.

Select Harvests (SHV.ASX) has been tightening its price range over five to six weeks near major support. Gary noted this as "pretty constructive." One important nuance: approximately 80–90% of the world's almonds are produced in just two regions — California and Australia — which limits SHV's direct exposure to European supply disruptions, though the broader agricultural demand environment provides context for the sector.

Inghams Group (ING.ASX) is a different proposition entirely. The stock has declined approximately 50% from its 2024 high of around $3.90 to approximately $1.80 — making it a laggard rather than a leader. Gary was explicit about the distinction: "The lagards, the ones that are probably the deepest there, they don't tend to come out the strongest." He referenced Beach Energy directly as a prior example of a laggard that eventually moved, but significantly underperformed sector leaders throughout the cycle. For more on the distinction between ASX momentum leaders and laggards, see How to Identify ASX Momentum Leaders: Why Beach Energy Failed While Paladin Rallied 40%.

As Gary summarised: "This agricultural sector is probably one to keep an eye on here over the next few weeks."

Why Are Some ASX Discretionary Retail Stocks Moving Up When the Fundamental Playbook Says They Shouldn't?

This is the most counterintuitive observation from Gary's 10 March session — and the one with the most direct implication for momentum traders who learn to follow price action over fundamental consensus.

Under the standard inflation playbook, high oil prices compress consumer discretionary spending. Retailers are a sector to avoid. Gary knows this — and he is watching the price action anyway. "For some reason, the discretionary retail is actually showing a little bit of strength the last week or two here, which is kind of very strange," he acknowledged. "The playbook has stayed away, but the price action is telling us something else."

Lovisa Holdings (LOV.ASX) is among the names Gary flagged as showing early accumulation signals, with volume coming in on positive price action despite the unfavourable fundamental backdrop.

Myer Holdings (MYR.ASX) is particularly notable on the chart. After seven consecutive weeks of making lower highs — a pattern characteristic of an aggressive downtrend — the session in question saw a break above a prior swing high on significantly higher volume. Gary identifies this first weekly swing high break as a potential end-of-downtrend signal: "A lot of long traders will look for a weekly break before they go long here — and we've got three pretty bullish candles there on much higher volume." His core rationale cuts through the fundamental noise. "The market looks ahead, and by the time we're saying we shouldn't be buying that sector, all that's used priced in."

Nanosonics (NAN.ASX) follows the same principle from outside the retail sector entirely — a descending wedge pattern with rising volume at the lows, while the broader market continues to sell off. Several analysts have the stock on their radar ahead of new product launches in 2026. Gary was measured about all three names: "I haven't jumped into any of these — the fundamentals have told me not to. But the price action is telling me I should be watching this pretty closely."

For more on how Gary's accumulation signal framework identifies these early-stage setups across sectors, see From Energy to Growth: The 3-Signal Framework Gary Glover Uses to Identify the Next ASX Market Leaders.

How Do Momentum Traders Identify Sector Opportunities During Extreme Market Volatility?

The common thread across all of Gary Glover's analysis in this session is a disciplined application of relative strength — identifying what is holding up or rising while the broader market falls. This is central to Mark Minervini's SEPA methodology and the reason sector analysis precedes individual stock selection in systematic momentum trading.

Gary's observation about the timing of information is particularly instructive: "Quite often with markets, we find out the real reason why it's gained so much only after the fact. As momentum traders, we're quite possibly selling into that last flurry of share price — which might be off the back of the news — which you call selling into heat. So we just need to trade the chart."

The practical process is systematic. Screen for sectors showing positive price action relative to the index. Identify the leading stocks within those sectors. Wait for a technically sound entry — whether a false break reversal, an accumulation volume signature, or a first weekly swing high break. Size positions appropriately given the higher-risk market environment, and maintain strict risk discipline.

For readers building this skill systematically, How Mark Minervini Finds High-Probability VCPs: The ASX Sector Strength Method provides the sector-first framework that underpins this approach. And for a deeper understanding of Gary's process-driven philosophy — why he follows the chart even when the fundamentals argue otherwise — see Why Gary Glover's Trading Philosophy Emphasises Process Over Market Opinions.

As Gary concluded simply: "Just got to respect the price action and follow the money flow."

Frequently Asked Questions

What is relative strength trading on the ASX? Relative strength trading identifies stocks or sectors that are rising, or declining less than the broader market, during a given period. Momentum traders use relative strength to find potential leaders before a broader market recovery. On the ASX, relative strength is particularly useful during volatile periods because Australia's commodity-heavy index structure frequently produces sector leadership that diverges significantly from global trends.

How does an oil price shock affect ASX agricultural stocks? When oil prices rise sharply and remain elevated, input costs across the agricultural supply chain increase — including fuel, fertiliser and transportation. Supply chain disruptions compound this effect. Farmers typically respond by reducing crop sizes, limiting supply precisely when costs are rising. This sequence historically creates a lagged effect on agricultural company revenues and share prices, making agricultural stocks a secondary consideration following sustained oil price shocks.

What is the oil shock playbook in share market analysis? The oil shock playbook describes a pattern of sector rotation that has historically followed sustained high oil prices. Energy and oil and gas producers have typically been observed moving first. Agricultural stocks have followed as food input costs and supply constraints flow through the system. Understanding this historical sequence may assist momentum traders in identifying potential sector shifts before they become broadly recognised.

Which ASX agricultural stocks are best positioned to benefit from rising oil prices? In Gary Glover's 10 March 2026 analysis session, he identified Elders Limited (ELD.ASX) as the largest-cap sector leader showing a bullish false break pattern, GrainCorp (GNC.ASX) as displaying six weeks of rising volume during the broader market selloff, and Select Harvests (SHV.ASX) as showing price tightening near support. These observations are educational in nature and reflect Gary Glover's technical analysis at a specific point in time. Past performance is no guarantee of future results, and all trading involves risk. This does not constitute financial advice.

How do momentum traders identify sectors showing relative strength during a market correction? Momentum traders screen systematically for stocks making higher lows, or holding near 52-week highs, while the broader index is declining. They look for specific chart signals including price tightening (contracting volatility ranges), volume expansion on up weeks, and false break reversals. The process involves reviewing sector performance first, then identifying the leading stocks within outperforming sectors, then waiting for technically sound entry conditions before committing capital.

Key Takeaways

The March 2026 market selloff is generating conditions where historical playbooks are partially working and partially being inverted. Gary Glover's analysis on 10 March identified two sectors — agricultural stocks and selected discretionary retailers — showing early accumulation signals that contradict what the fundamental consensus would suggest.

The oil shock playbook provides the historical framework: sustained high oil prices flow through to food production costs, supply constraints tighten, and agricultural company revenues may reflect this with a lag. The relative strength evidence — ELD's false break reversal, GNC's six weeks of rising volume, LOV and MYR's accumulation patterns — is price action that Gary Glover identified as worth monitoring before the fundamental story becomes consensus.

Watch the full analysis session with Gary Glover on YouTube: [link to video]

Ready to develop your own relative strength screening process? Explore FMP Membership for daily Top 10 ASX momentum rankings, Gary Glover's weekly reports, and full access to the educational library — or take the free VCP quiz to test your pattern recognition knowledge.

Guest Contributor Notice

This article is based on analysis and commentary provided by Gary Glover (AR 259215), Authorised Representative of Novus Capital Limited (AFSL 238 168), during a recorded market analysis session on 31 March 2026. Content has been edited and summarised by Finer Market Points for educational purposes. Gary Glover has not independently reviewed or endorsed this publication.

Educational Disclaimer

This content is for educational purposes only and does not constitute financial advice. Past performance is no guarantee of future results.

The information, opinions and other materials appearing on the Web Site are of a general nature only and shall not be construed as advice. Finer Market Points Pty Ltd, CAR 1304002, AFSL 526688, ABN 87 645 284 680. This general information is educational only and not financial advice, recommendation, forecast or solicitation. This is not taxational advice. Rose Bay Equities accepts no responsibility for the accuracy or completeness of the information, opinions or other materials provided on or accessible through the Web Site. The Web Site has not been prepared with reference to your individual financial or personal circumstances. You should not rely on any advice in this Web Site without first seeking appropriate professional, financial and legal advice. Further, where Rose Bay Equities makes third party material available or accessible through the Web Site you acknowledge that Rose Bay Equities is a distributor and not a publisher of that content and that its editorial control is limited to the selection of those materials to make available. We accept no liability for any loss or damages arising from use.