The share market has started the new year with some healthy consolidation, creating a few interesting opportunities.
Several quality ASX 200 shares have pulled back in recent months, pushing key technical indicators into oversold territory. For patient investors, that can sometimes set the stage for a rebound.
Here are 3 ASX 200 shares I believe are worth buying this month.
Lynas Rare Earths Ltd (ASX: LYC)
Lynas Rare Earths is one of the most strategically important companies on the ASX.
The company is the largest producer of rare earth materials outside China, supplying critical materials used in electric vehicles, wind turbines, defence systems and electronics.
Despite those strong long-term tailwinds, Lynas shares have pulled back from their recent highs. On Friday, the share price closed at $12.22, down almost 17% in a month.
That sell-off has pushed the stock into oversold territory from a technical perspective, suggesting selling pressure may be starting to ease.
Fundamentally, global demand for rare earths continues to grow, while supply outside China remains limited. Lynas is expanding its processing capabilities and is well positioned to benefit from Western governments pushing to secure critical mineral supply chains.
Xero Ltd (ASX: XRO)
Xero is a high-quality software business that has struggled to keep investors interested lately.
The accounting software provider has seen its share price slide as investors rotated away from growth stocks. Xero shares closed Friday at $112.25, putting them more than 30% lower than this time last year.
That pullback has pushed the stock into oversold territory, which stands out for a business of this quality.
Xero continues to grow its subscriber base globally, while management is placing greater focus on cost control and improving margins. Over time, earnings tend to matter more than headline growth, and that shift could work in Xero's favour.
With strong recurring revenue and a sticky customer base, the recent weakness looks more like sentiment-driven selling than a problem with the underlying business.
Transurban Group (ASX: TCL)
Transurban offers something different from the other two stocks on this list.
The toll road operator owns high-quality infrastructure assets across Australia and North America. Its revenue is supported by long-term contracts and inflation-linked toll increases.
Shares closed Friday at $14.18 after drifting lower in recent months. That decline has pushed the stock into oversold territory.
With interest rate expectations starting to stabilise, infrastructure assets like Transurban could come back into favour. Traffic volumes remain solid, and the company continues to invest in growth projects.
For investors seeking stability and income alongside potential capital upside, the shares look appealing at current levels.
Foolish takeaway
All 3 of these ASX 200 shares are high-quality businesses that have retraced for different reasons.
With each showing signs of being oversold, I believe January could offer a compelling entry point for long-term investors.
The post Here are my top 3 ASX shares to buy in January appeared first on The Motley Fool Australia.
Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group and Xero. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. The Motley Fool Australia has positions in and has recommended Transurban Group and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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