3 ASX Stocks to Fly After War Ends

The war is over, the oil price is being dumped, and stock markets are flying. But which ASX stocks have the potential to outperform on this game-changing news? Three beaten-down names are setting up for what could be a serious upside as inflationary pressure eases, consumer sentiment recovers, and the path to interest rate cuts becomes clearer.

In the latest episode of the Hot Stock Tips Show, Filip Tortevski and senior analyst Pedro Banales break down the sectors most likely to bounce and the three specific ASX stocks offering the most compelling technical setups right now.

Why the Macro Backdrop Has Shifted

Oil has been one of the biggest contributors to the inflationary environment over recent years. With the oil price now falling away significantly, weak consumer sentiment numbers putting pressure on the RBA, and banks already starting to cut fixed rates, we are potentially moving into a rate cut environment with inflation easing. That combination is precisely why consumer discretionary was the best performing sector last week, jumping a whopping 8%.

The sectors worth watching now extend beyond just discretionary. Real estate and financials look attractive, though both rely on the interest rate trajectory unfolding as expected. Consumer staples and utilities should also benefit as sentiment shifts. The common thread is that many of these sectors have been heavily beaten down, largely on negative war-driven sentiment, and the unwinding of that discount creates opportunity.

1. Aristocrat Leisure (ALL)

Aristocrat Leisure is coming off a 44% correction, one of the larger pullbacks in its history outside the dotcom crash and the GFC. What makes the current setup particularly interesting is that since 2012, the stock has literally pulled back to its average rate of rise, which is exactly the kind of mean reversion long-term investors look for.

The stock has already recovered around 23% from the recent lows, which is a very positive sign. There is some minor resistance overhead, but the price action is breaking through around the $52 level, suggesting genuine buyer commitment. This is a textbook case of a stock returning to its sustainable rate of rise, finding buyers, and beginning to confirm a turn.

What the Weekly Chart Is Telling Us

On the weekly timeframe, we have seen multiple tests of the key support level, a higher base printing, and a strongly bullish week breaking the downward momentum. All of these signals point to either sustained upside or a meaningful reversal taking shape. If the stock continues higher from these levels, there is a good case for it pushing back into the $65 region fairly quickly.

Aristocrat sits at number 18 in the ASX rankings, so it is part of the top 20 and offers strong liquidity. With higher bases and higher highs being established, dividends remaining stable, and the long-term growth trend intact, it is the kind of name that fits well in a super portfolio for investors seeking stability with growth potential.

2. Harvey Norman Limited (HVN)

Harvey Norman is a fascinating play because it is more diversified than most investors realise. The business is simultaneously a retailer, a REIT, a financial services provider, and a technology investor. They invest heavily in commercial property and real estate, provide financing and consumer loans, and have exposure to digital systems and emerging technology. This diversification has historically produced stable dividends and underpinned the long-term performance of the stock.

Technically, Harvey Norman has just experienced one of those blow-off acceleration moves we previously saw in 2007. Back then, the stock came back to retest a major support zone before resuming its long-term uptrend. Today, after a near-identical pattern of acceleration into a new all-time high, the stock has pulled back into a critical convergence of support, including a long-term trend line and a major historical level around $4.40.

The Line in the Sand

This is the moment of truth. If Harvey Norman accepts $4.40 as a new base, that would be very bullish and would suggest the long-term trend continues, with potential to push back toward the $7 levels over time. If $4.40 breaks along with the trend line, the stock could fall further toward $3.30 or even $2.20 in a worst-case scenario.

Big buying came in during June with a strong bullish bar exactly where you want to see it. On the weekly chart, however, it is still slightly early. Watching for the stock to start making higher bases and getting through the momentum at $4.90 will provide the cleaner confirmation that the next leg up is genuinely underway.

Why Harvey Norman Suits Active Traders

What is particularly important about Harvey Norman is that it is not a buy-and-hold stock. If you bought the 1999 high, you would essentially be back where you started today. The stock has had multiple multi-year drawdowns of 50% or more, including 2001 to 2003, 2009 to 2012, and 2016 to 2020. The opportunity comes from riding the up moves and stepping aside during the cyclical downturns. The current setup, with the stock back at its agreed value zone, looks exactly like the moment to start watching closely.

3. JB Hi-Fi (JBH)

JB Hi-Fi is another quality company that has been beaten down, this time partly due to an ongoing ACCC lawsuit ordering the company to refund up to $250,000 to around 200 consumers. While that figure is relatively small for a retailer of JB Hi-Fi's size, the negative sentiment surrounding the case has weighed on the stock. As Warren Buffett's wisdom suggests, beaten-down quality companies at fair prices are often where the best long-term opportunities sit.

The current 44% correction is approaching the maximum drawdown levels we typically see for this stock outside of crisis periods. Excluding the GFC, where the stock fell 67%, and the COVID crash that hit the 50s, normal market corrections in JBH have averaged 42% to 50%. Right at the 44% mark, we are at the edge of where the market historically picks the stock back up.

The Long-Term Growth Story

JB Hi-Fi has been a remarkable wealth creator. Investors who held since 2005 would still be up around 1500%, which speaks to its growth credentials. While it can be traded actively for additional return, it is one of those names that rewards patient holders who buy near the major support zones. The absolute floor, if further weakness emerges, would be around $55, but the technicals suggest buyers are already stepping in.

Price has now broken above the relevant momentum line, volume is rising as price rises, and the stock has reverted to its long-term trend. Combined with the broader macro shift toward easier monetary conditions and improving consumer sentiment, JB Hi-Fi represents a textbook example of a quality beaten-down retailer returning to support at exactly the right moment.

The Lesson: Stocks Returning to Long-Term Trend Are Rare Opportunities

What links Aristocrat Leisure, Harvey Norman, and JB Hi-Fi is that all three stocks have just snapped back to their long-term trends after periods of acceleration. These opportunities do not come along often. Sometimes years pass between setups like these, and investors who fail to recognise them when they appear can wait a long time for the next one.

The skill lies in knowing how to identify these key levels, read price action for confirmation, and manage risk appropriately. This is exactly what we focus on at Wealth Within. Our share trading education is built around teaching you how to identify these setups for yourself, so you are never reliant on someone else's view to make confident decisions.

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Final Thoughts

The combination of falling oil prices, easing inflation, the path to rate cuts, and improving sentiment creates a genuinely supportive backdrop for consumer-facing ASX stocks. Aristocrat Leisure, Harvey Norman, and JB Hi-Fi all sit at critical technical junctures that align beautifully with this macro shift. Aristocrat looks the most advanced in its recovery, Harvey Norman offers the highest reward potential if support holds, and JB Hi-Fi sits right at the edge of historical correction limits.

As always, the difference between catching these moves and watching them go by comes down to skill, structure, and discipline. Identify the levels, wait for confirmation, and manage your risk. With the right education and approach, opportunities like these become far easier to act on with confidence.

Disclaimer: This article is general in nature and does not constitute personal financial advice. Always conduct your own research or consult a licensed adviser before making investment decisions.