Key takeaways:

• Lithium stocks lead the way this week as price outlook optimism reemerges 

The local share market has shrugged off concerns the RBA could hike rates at its next meeting, boosted by a series of strong trading updates.

Which shares excelled?

Shares in communications and metal detector business Codan (ASX: CDA) have soared this week after the company first-half update. In its release, management indicated the business is on track to achieve the upper range of its revenue guidance of between $200 million to $215 million. 

Pleasingly for shareholders, it appears this has also translated to the bottom line, with first-half net profit expected to come in above guidance at $31 million when its audited results are published.

Elsewhere, there is something akin to a resurgence going on at department store Myer (ASX: MYR). The stock has raced to a near six-year high following its latest trading update. The retailer reported that in the five months to December 31, total sales grew at just shy of 25%. 

On the back of its strong sales growth, with the results reflecting Myer best sales on record for the first five months, net profit is expected to double the corresponding amount last year. Management has forecast first-half profit of between $61 million to $66 million.

Lithium stocks are on a tear this week, rallying strongly as the broker upgrades come through thick and fast. By far the biggest catalyst for the sector was news that UBS has upgraded its lithium price outlook. The broker sees prices climbing by as much as 50%, arguing the lithium market will continue to face a deficit over the near and mid-term. 

UBS also went on to claim that supply would be expected to catch up with slowing demand out of Europe and China, but no signs of demand rationing have transpired over the last year. This week winners include the likes of Pilbara Minerals (ASX: PLS), Liontown Resources (ASX: LTR), Allkem (ASX: AKE), Sayona Mining (ASX: SYA), and even nickel producer IGO (ASX: IGO), with three of the five treated to a broker upgrade.Buoyant iron ore prices are helping more than just the major miners, with contractor Monadelphous (ASX: MND) also receiving a boost. The company is a direct beneficiary of the major miners' activity, including investment in new developments and infrastructure, while renewed demand from China saw iron ore prices hit a seven-month high. It appears investors are positive that Monadelphous is likely to see a windfall come its way.Other winners this week include Breville Group (ASX: BRG), which has shrugged off persistently high short interest to race out of the blocks in 2023, as well as names like James Hardie (ASX: JHX), ARB Corporation (ASX: ARB), Karoon Energy (ASX: KAR), and Boss Energy (ASX: BOE).

Which shares dragged on the market?

Despite a positive outcome for biotech Neuren Pharmaceuticals (ASX: NEU), the company finds itself on the list of this week underperforming stocks. The US Food and Drug Administration provided the business with approval to proceed with its open-label phase two clinical trials, but it looks like profit takers took advantage of that development. 

Neuren is looking to test its NNZ-2591 drug candidate on up to 20 children in each trial with Prader-Willi syndrome, whereby it will assess the efficacy and safety of its treatment across a period of 13 weeks.

Gold stocks may have started the year in strong fashion, but some of that momentum has come to an abrupt halt this week. Several goldies were pummelled in the wake of red-hot Australian inflation data, which showed that core inflation has now surpassed the Reserve Bank of Australia forecast. 

That has prompted a shift in money markets, with the Aussie dollar rallying on increasing bets the central bank will hike rates at its next Board meeting. West African Resources (ASX: WAF) is one of the gold producers feeling the heat, with its quarterly report also falling flat with shareholders as rising costs become an industry-wide concern for miners.There was another example of this with copper producer 29Metals (ASX: 29M), despite the company achieving its production guidance for 2022. In its quarterly update, 29Metals reported costs at the top-end of its previous guidance due to inflationary pressure, and lower copper sales for the period.Coal names have also faced some selling pressure this week, including New Hope Corporation (ASX: NHC), Yancoal (ASX: YAL), and Whitehaven Coal (ASX: WHC). That follows last week fresh development where the NSW government has expanded its domestic coal reservation policy, which entails a proportion of local uncontracted coal production being reserved for the domestic market at a capped price of $125 per tonne.Mincor Resources (ASX: MCR) and Judo Capital (ASX: JDO) round out some of the other names on the back foot this week.

We'll be back next week with another Weekly ASX Trading Wrap Up - until then, have a great week!