Buy These ASX Materials Stocks: Last Chance Before the Rally

The ASX materials sector was one of the best performers of 2025, but 2026 has told a very different story. With the sector down around 20% from its all-time high, many investors are wondering whether this pullback represents the end of the run or a rare second chance buying opportunity. In the latest episode of the Australian Stock Market Show, Wealth Within analysts Filip Tortevski, Janine Cox, and Pedro Banales break down eight ASX materials stocks that are showing strong signs of a rebound.

Their analysis covers a wide range of sub-sectors within materials, from iron ore heavyweights like Rio Tinto and Fortescue Metals to steel, precious metals, fertiliser, and battery materials plays. The common thread is that each of these stocks has pulled back to key support levels and is now showing the early signals of a move higher. As Australia’s leading provider of share trading education, Wealth Within’s approach is grounded in disciplined technical analysis, pattern recognition, and understanding the psychology of market cycles.

Why the Materials Pullback is an Opportunity

According to Senior Analyst Janine Cox, the materials sector’s 20% decline from its highs is a healthy and normal correction following a strong bull run. Historically, these types of pullbacks in cyclical sectors like materials have been followed by powerful rallies as stocks retest key support levels and buyers step back in.

Pedro Banales added that within the broader materials sector, there are distinct sub-sectors including precious metals, base metals, lithium, iron ore, rare earths, and fertilisers, each operating on its own cycle. The key to profiting from these opportunities is understanding the timing of each cycle and being positioned before the next leg up begins.

Filip noted that many investors missed the initial run in 2025 and are now being presented with a second chance to enter at much more attractive prices. However, he cautioned that catching a falling knife is a real risk, and that disciplined entry rules and stop-loss strategies are essential. For beginners wanting to understand how to read these market signals, Wealth Within’s Short Course in Share Trading provides the foundational strategies for identifying profitable entry points.

Stock Spotlight #1: Mineral Resources

Mineral Resources has had a dramatic ride, falling more than 70–80% from its highs before staging a sharp recovery. Janine highlighted that the stock is now consolidating on the weekly chart after an incredible bounce off its lows, with the monthly chart showing significant room to run back toward its previous highs.

The analysts estimate short-term upside potential of around 40%, with longer-term potential of approximately 67% if the stock can sustain its current recovery trajectory. The key risk is if the stock takes out its recent low, which would signal that the recovery has failed and further downside is possible.

Janine emphasised the importance of not falling in love with a stock’s story near the top, noting that new investors often ride a stock up and then hold it all the way back down because they become greedy. Timing, discipline, and having clear exit rules are what separate profitable traders from the rest.

Stock Spotlight #2: Alkane Resources

Alkane Resources offers diversified exposure to gold, silver, and copper, making it an attractive play across multiple precious and base metal sub-sectors. Pedro noted that the stock has pulled back approximately 27% from its February 2026 high, which is consistent with previous corrections of 25–26% that the stock has experienced before resuming its uptrend.

On the daily chart, the stock appears to be reversing to the upside, with Pedro looking for a break above the short-term downtrend momentum line as confirmation. If the breakout holds, the stock could challenge its all-time high of $2.10 and potentially push beyond it.

Pedro cautioned that this is also a stock with a history of sharp boom-and-bust cycles, with previous rallies of 700–943% followed by extended downtrends. The current rally has only gained around 382%, suggesting there may be further upside, but the risk of a major top forming needs to be monitored closely. Learning to recognise these patterns through chart analysis is a skill that can dramatically improve your results.

Stock Spotlight #3: Rio Tinto

Rio Tinto, one of the world’s largest mining companies, is a stock that Janine used to illustrate why trading education matters. During the GFC, Rio fell by a staggering 80%, and it took 13 years from 2009 to 2021 for the stock to recover above its 2007 high. Investors who bought near the top and held through that entire period endured more than a decade of dead money.

Today, Rio is in a very different position. After a four-to-five-year consolidation period that built a solid foundation, the stock broke out to new highs and is now pulling back in an orderly fashion. Janine sees this consolidation as a bullish setup, with analysis suggesting Rio could push through the $200 level in the next phase of its rally.

The lesson from Rio’s GFC experience is clear: without proper rules for managing downside risk, even the biggest and most respected stocks on the ASX can devastate your portfolio. These principles of risk management and capital preservation are central to the nationally accredited Diploma of Share Trading and Investment, where students learn how to trade confidently across bull and bear markets.

Stock Spotlight #4: Bisalloy Steel (ASX: BIS)

Bisalloy Steel is a manufacturer of high-grade steel used in engineering, heavy machinery, and notably defence applications including submarines. With a PE ratio of around 11 and a dividend yield of approximately 7%, the stock offers attractive fundamentals alongside its technical setup.

Pedro highlighted that the stock’s character changed significantly from 2023 onward, with volume increasing sharply as the market recognised its strategic importance during a period of escalating global conflict. The stock has since pulled back from its highs but is holding above key support at $4.60, a level that has been significant since 2007.

On the weekly chart, the most recent bar showed strong buying activity, with the stock opening low and closing above the prior weeks’ price action, a classic reversal signal. Pedro sees a potential move back to the $6.00 level, representing significant short-term upside for investors who time their entry correctly.

Stock Spotlight #5: Metals X

Metals X has broken through a historic long-term resistance level on its monthly chart, a pattern that Janine described as one of the most significant technical signals a stock can produce. After breaking through, the stock has pulled back to retest that breakout level, which is a classic and healthy setup before another leg higher.

Janine sees potential for Metals X to move toward the $1.82 mark and possibly challenge its all-time high. The stock has a history of consolidating sideways and then breaking out sharply, and the analysts believe this current phase is setting up for another such move. The key for investors is having rules ready to manage the trade and knowing when to protect capital during sell-offs.

Stock Spotlight #6: Fortescue Metals

Fortescue Metals has been trading in a long-term sideways formation since its post-COVID recovery in December 2020, which is where Janine sees the opportunity. The stock has recently pulled back approximately 20% from its recent peak near $23.30, a correction she described as normal and healthy before a potential breakout.

With approximately 27.5% upside to its previous high, FMG offers a compelling risk-reward setup for traders who can identify the right entry point. The critical level to watch is the current month’s low; if FMG holds above it and begins to move higher, the stock could challenge and potentially break through its all-time high in the coming months.

For advanced traders wanting to master the timing tools and portfolio optimisation techniques needed to trade stocks like Fortescue through these complex sideways patterns, the Advanced stock trading course covers professional-level strategies including Elliott Wave analysis and time analysis.

Stock Spotlight #7: PRL Global

PRL Global is involved in the production of phosphate rock used in fertiliser, positioning it as a beneficiary of global supply disruptions caused by conflicts in the Russia-Ukraine-Belarus region and the Middle East, two of the world’s largest fertiliser-exporting areas.

Pedro flagged this as a high-risk, high-reward opportunity. The stock has become more liquid in recent months, with increasing volume and improving bar quality on the chart. The pattern is showing higher highs and higher lows, with support being established around $1.25. A short-term move to $2.00 represents approximately 25% upside, with further potential to challenge the all-time high for an additional 35%.

Both Janine and Pedro cautioned that this type of stock requires careful liquidity assessment and is not suitable for beginners. If the stock’s liquidity dries up, you may not be able to exit at the price you want, which can dramatically increase your risk.

Stock Spotlight #8: IGO Limited

IGO Limited is involved in nickel, copper, and cobalt production, all materials essential for the clean energy transition and battery manufacturing. This was Pedro’s standout pick of the night, and Janine agreed it was one of the most compelling setups across the entire materials sector.

The stock has pulled back approximately 30% from its highs, consistent with its previous correction patterns before resuming its uptrend. A critical support level at $6.70, which dates back to a significant high in 2020, is coinciding with the stock’s current uptrend momentum line, creating a strong confluence of support.

Pedro’s analysis suggests that a break above $8.00 on strong volume would confirm a new sustained uptrend, while a break below $6.70 would signal further downside. He leans toward the bullish scenario, citing the pattern of higher lows, improving momentum, and the structural demand for battery materials as a powerful long-term tailwind.

Hot Stock Tip: Resolute Mining

The week’s hot stock tip was Resolute Mining, a gold producer that has recently announced a strategic non-binding partnership with Guinea’s state-owned NBMA Mining to explore and develop new gold projects. Pedro noted that state-backed partnerships are particularly comforting for mining companies operating in emerging markets, and this deal could open a fourth revenue stream for Resolute.

On the chart, the stock has risen approximately 750% from its 2022 low, pulled back to around 600% gain, and is now showing signs of a new leg higher. Pedro sees short-term potential to the $1.41–$1.50 level, with a longer-term target near $2.10 if the stock can break above its 30-year resistance ceiling. A pattern similar to its 2025 recovery, which saw 115% gains from trough to peak, appears to be forming.

Final Thoughts: Timing the Materials Rally

The ASX materials sector’s 20% pullback from its 2025 highs is creating what the Wealth Within analysts describe as a last-chance opportunity for investors who missed the initial run. From iron ore giants like Rio Tinto and Fortescue to niche plays in steel, fertiliser, and battery metals, the stocks profiled in this analysis share a common setup: they have pulled back to key support levels, are showing signs of buyer interest returning, and have significant upside potential if their respective breakouts confirm.

However, the analysts repeatedly emphasised that timing and risk management are everything in materials stocks. These are cyclical, volatile names that can deliver extraordinary gains but can just as quickly wipe out profits for investors without clear entry rules, stop losses, and exit strategies.

To explore more expert stock analysis and market insights, visit the Hot Stock Tips videos for more essential educational videos. If you’re new to the market, start with our Stock Market for Beginners guide for important steps to build your investing confidence. And if you’re ready to take your trading to the next level with structured, expert-led education, explore Wealth Within’s range of trading courses designed to help Australian investors trade with confidence in any market condition. With over two decades of experience guiding Australians toward financial independence, Wealth Within showcases the company’s mission and track record as Australia’s most trusted share trading educator.