Why Woodside Energy has puzzled investors for years

Woodside Energy just got the green light it's been chasing for years, the extension of its Northwest Shelf gas project through to 2070.

The market didn't waste time reacting as its shares climbed on the news.

But this rise may not be just a one-day rally, rather this could be the ignition for a long-overdue rerating of the stock.

Let's be honest, Woodside Energy has puzzled investors for quite some time. Solid fundamentals? Check. A good dividend yield? Check. A P/E ratio that screams value? Also check.

And yet, for too long, Woodside has been a stock full of potential that has underperformed. But that might be about to change.

The recent low near $18.60 appears to have formed a firm base, and with resistance overhead around $28, there's serious potential for this stock.

But beyond the technical aspect, this recent approval means the story has just shifted. What we're seeing isn't just regulatory success, it's a renewed vote of confidence in Woodside's long-term relevance in a changing energy landscape.

Despite polarising thoughts on fossil fuels, the macro trend is clear and that is, gas remains vital. While it may not be a forever fuel, it's buying time as the world ramps up renewables and nuclear.

And that matters, especially in Asia, where energy demand is exploding.

Woodside isn't just in the game, it's strategically located, well-equipped, and now has the regulatory backing to lead the charge. This extension keeps it in the driver's seat well into the middle of this century.

Another deep value play in this area is Santos. After bouncing from lows around $5.20, it's now making a move toward $9.

Like Woodside, it offers a low P/E, strong dividend yield, and exposure to the same powerful themes.

So, what's the bottom line for investors? Woodside's approval might just turn out to be the spark that lights a fire under a stock that's been unfairly ignored.

Combine strong fundamentals, shifting sentiment, and now regulatory momentum and you've got a stock that's ready to run.

In a market hungry for dependable, scalable energy solutions, Woodside and Santos look like they're not only part of the answer, but they might also just be about to lead it.

What are the best and worst-performing sectors this week? 

The best-performing sectors include Information Technology, up 4.45% followed by Energy, up 4.04% and Consumer Discretionary, 1.34%.

The worst-performing sectors include Utilities, down 1.84% followed by Consumer Staples, down 1.09% and Materials down 0.54%.

The best performing stocks in the ASX top 100 include Light & Wonder, up 13.04% followed by Block up 9.49% and WiseTech Global, up 8.72%.

The worst-performing stocks include ALD down 8.31% followed by IDP Education, down 5.76% and Jame Hardy Industries 4.98%.

What's next for the Australian stock market?

The All-Ordinaries Index posted another gain this week, rising just more than half a percent, marking its seventh consecutive weekly rise.

However, signs of slowing momentum are becoming increasingly difficult to ignore as the market remains locked in a tug of war around the 8600-point level.

This is no surprise given the current volatile global trade environment where last week's proposed 50% tariff on Europe, was followed by its swift pause. With investors on edge, it's no wonder the market has stalled at this critical resistance level.

It's likely the 'big end of town' set themselves up for the next move up during the pullback earlier this year, capitalising on undervalued opportunities.

To sustain this current rally, the market must break decisively above the 8600 level, signalling further upside potential.

Until that happens, the probability of a pullback continues to grow, with 8375 as the first key support level to watch. If selling pressure increases, a deeper retreat to 8170 or even 8,000 could unfold in the weeks ahead.

For now, caution is paramount.

Chasing the market rally at these levels comes with elevated risks, especially as momentum fades and sellers start to emerge. However, a pullback could offer a much-needed reset, creating fresh opportunities for patient investors.

As always, the best opportunities tend to emerge when others are stepping back. Stay disciplined and keep the bigger picture in mind.

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