The fortunes of ASX mining shares are heavily dependent on how the global economy is faring.
That's because commodity prices can fluctuate wildly up and down based on the immediate demand and supply.
Right now, there are many dark clouds hanging over global prosperity.
Most Western nations are having to battle high inflation with interest rate hikes, deliberately dampening consumer demand to cool the economy.
Meanwhile, the world's second largest economy, China, is grappling with the opposite. The expected post-lockdown economic resurgence never really arrived, and it is now potentially dealing with deflation.
Yikes.
But in the face of such gloom, some experts think resources stocks might make an excellent contrarian play.
Buy them for cheap now, and soon the global economy will turn around, right?
Here are two such opportunities from the S&P/ASX 200 Index (ASX: XJO) flagged by Fairmont Equities boss Michael Gable this week.
'Strong buying' despite negative headlines
Major iron ore producer Fortescue Metals Group Ltd (ASX: FMG) has faced multiple hardships this year.
As well as the stuttering Chinese economy sending iron ore prices plunging in recent months, the separation of founder Andrew Forrest from his wife Nicola has triggered uncertainty about the supply and demand for the stock itself.
Gable, though, has noticed these headwinds haven't necessarily put investors off.
"We've seen strong buying in FMG shares this year, despite the negativity," Gable told The Bull.
"Fortescue Metals Group remains a contrarian trade, as the charts indicate the stock is near the start of a new uptrend."
The Fairmont team is bullish on the stock as there is much speculation that the Chinese government could bring in stimulus to kick-start the economy.
"In our view, possible Chinese stimulus and bearish investors chasing the stock higher may fuel share price upside."
Gable is not wrong when he labels this a contrarian trade.
According to CMC Markets, the sentiment from the rest of the professional community is negative, with four analysts rating FMG a hold and 10 classifying it as a sell.
'High premiums in a market of tight supply'
Perhaps an investment that requires less courage could be Whitehaven Coal Ltd (ASX: WHC), which is rated as a buy by eight out of 13 analysts surveyed on CMC Markets.
Gable loved the latest operational update from the coal miner.
"A strong June quarter production report indicates that Whitehaven Coal remains capable of achieving high premiums in a market of tight supply."
The Whitehaven share price has rocketed more than 24% since the end of May.
"During the past four weeks, the charting pattern on Whitehaven Coal looks bullish."
This gives Gable's team confidence that the bottom has now passed.
"[We] expect the stock to trend higher for the rest of 2023."
