Milk and cheese producer Saputo (SAP.TO) spent the last five years stuck in the red zone of the SIA S&P/TSX Capped Composite Index Report. In recent weeks, however, it has rocketed back up the rankings and recently returned to the green Favored Zone for the first time since the spring of 2017. On Friday it finished in 59th place, up 11 spots in the last week.
Since bottoming out in May, Saputo (SAP.TO) shares have been steadily recovering lost ground. They snapped out of a downtrend in July and over the summer a series of higher lows has established a new uptrend. Accumulation appears to have accelerated in the last week with the shares rallying up off of $32.50 and clearing $34.00 to trade at their highest level in a year on an uptick in volume.
Next potential resistance appears in the $39.00 to $41.00 area near previous peaks and the $40.00 round number. Initial support has moved up toward $32.50 with more possible at the 50-day moving average near $31.90.
A long-term downtrend in Saputo (SAP.TO) shares that dates back to 2016 appears to have bottomed out and a recover commenced. Back in June, the shares dropped toward $24.00 but then turned upward and haven’t looked back. Over the last three months, the shares have completed bullish Double Top and Spread Double Top breakouts that have extended into a bullish High Pole. Last week, SAP.TO snapped a downtrend line, confirming that its current advance continues.
Next potential upside resistance may appear near $36.70 or $41.35 based on previous column highs. Initial support appears near $31.95 based on a 3-box reversal.
With a perfect SMAX score of 10, SAP.TO is exhibiting strength across the asset classes.
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