Why Are Woodside (WDS) and Iluka (ILU) Falling Today?

By Jason McIntosh | 22 January 2025

Investors were met with disappointing news from Woodside Energy Group Ltd (ASX: WDS) and Iluka Resources Ltd (ASX: ILU), as both companies reported weaker financial and production results. These updates have contributed to significant share price declines, with Woodside falling by as much as 2.6% and Iluka dropping as much as 9.5%.

Let’s explore the factors driving these moves and their technical outlook.

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Woodside Energy Group Ltd (ASX: WDS)

Woodside shares dipped following the release of its fourth-quarter update, which highlighted softer financial and operational performance.

Key Updates:

• Revenue Decline: Q4 2024 revenue fell 6% from the previous quarter to $3.47 billion.
• Lower Production: Quarterly production dropped 3% to 51.4 MMboe, impacted by weaker seasonal demand at Bass Strait and an unplanned shutdown at the Pluto project.

The Technical Picture for WDS
Woodside’s share price has been under pressure since September 2023, trading below its declining 50- and 100-day moving averages—a sign of technical weakness that many professional investors avoid. However, a strong rally from December’s two-year low has recently pushed the stock back above these key levels.

This shift signals a potential turnaround, but caution is warranted at this early stage. Investors should monitor whether today’s dip attracts buying interest, as this could indicate strengthening demand and the start of a new uptrend.

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Iluka Resources Ltd (ASX: ILU)

Iluka’s shares tumbled following the release of its full-year 2024 results, which revealed a significant drop in revenue and profitability.

Key Updates:

• Revenue Decline: FY 2024 mineral sands revenue fell 8.9% year-on-year to $1,128 million.
• Lower Sales Volumes: zircon/rutile/synthetic rutile sales volumes dropped 3.8% to 475.2kt.
• Profitability Impact: Expected FY 2024 group EBIT is $330–340 million, well below FY 2023’s $492.3 million.
• Rising Costs: A 3% increase in total cash production costs further pressured earnings.

The Technical Picture for ILU
Iluka has been trading below its declining 50- and 100-day moving averages since July 2023, maintaining a weak technical structure. This setup often points to continued downside risk, and today’s sell-off reinforces the bearish outlook.

Trying to pick a low in these conditions carries elevated risk. Professional investors typically wait for signs of a stronger technical structure—such as a sustained break above key moving averages—before considering new positions.

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Key Takeaways for Investors

1. Woodside’s Potential Turnaround: The recent rally above key moving averages offers a potential window for recovery, but today’s dip needs to be closely watched for signs of buying interest.
2. Iluka’s Weak Technical Structure: With shares still below declining moving averages, the odds tend to favor further downside potential. Investors may want to wait for the technical picture to improve before considering opportunities.
3. The Role of Risk Management: Both stocks highlight the importance of using stop-losses and focusing on high-probability setups to protect capital in challenging market conditions.

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Final Thoughts

Woodside and Iluka’s disappointing financial updates have led to notable share price declines, reflecting weaker fundamentals and technical setups. While Woodside’s recent rally hints at a potential turnaround, Iluka’s ongoing weakness underscores the risks of trading against a downtrend.

At Motion Trader, we focus on systematic, rules-based investing to help investors identify strong opportunities while minimising risk. By prioritising stocks in uptrends and using disciplined strategies for protecting capital, we help investors navigate the markets with confidence.

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Jason McIntosh | Founder, Motion Trader

Jason’s professional trading career began over 3 decades ago. He’s a founder of two stock advisory firms, a listed funds management business, and has helped thousands of investors navigate the stock market. Click here to read Jason’s incredible story of, at age 20, sitting alongside some of the world’s greatest traders (and the life changing experience that came with that).