West Fraser Timber Co Ltd (WFG.TO) - February 12, 2024 (Daily Stock Report)

by SIACharts.com

SIAChartsā€™ relative strength rankings help investors manage risk by identifying stocks and sectors which are underperforming relative to their peers and/or their benchmarks and should potentially be avoided. Staying away from stocks that are not attracting capital can help investors to avoid areas at higher risk of absolute declines and relative underperformance and to reduce negative event risk.

Deep cyclical groups in the Materials sector, such as forest products, have been struggling in the Canadian relative strength rankings for some time. In the January 10th edition of the Daily Stock Report, we featured Interfor, whose shares have declined by 19.8% since then.

West Fraser Timber (WFG.TO) shares fell out of the green zone in the SIA S&P/TSX Composite Index Report at the beginning of August and have been pretty much flat since then, while the S&P/TSX Composite Index has climbed 4.4% over the same period. In the last month, WFG.TO has lost 8.9%, while the benchmark index has lost 0.9%.

West Fraser continues to slide within the Yellow Neutral Zone of the SIA S&P/TSX Composite Index Report, dropping 26 spots over the last month to 103rd place.

Candlestick Chart Rolls Down Within a Trading Range:

Since the beginning of 2022, West Fraser (WFG.TO) shares have been trending sideways between $90.00 support and resistance in the $120.00 to $125.00 area. The latest upswing, which peaked about a month ago ran into resistance near the $115.00 level.

In recent weeks, the shares have been backsliding, taking out their 10-week moving average to signal the start of a new downswing. Initial downside resistance appears near the $100.00 round number, followed by channel support near $90.00.

Point and Figure Chart Goes into a Downswing:

Since the fall of 2022, West Fraser Timber (WFG.TO) shares have been stuck in a sideways trading range between $87.50 and $117.50. The shares from the bottom to the top of this range as equity markets rallied between October and January. Earlier this month, however, the shares failed to break out for a third time and have started to drop back, with a bearish High Pole Warning suggesting that bulls have lost strength and bears have gained the upper hand again.

A close below $96.75 support would complete a bearish pending double bottom breakdown with next potential support after that at previous lows near $93.00, or the October low near $87.65. Initial resistance appears near $113.40 based on a 3-box reversal.

With a bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 3 out of 10, WFG.TO is exhibiting short-term weakness against the asset classes.

Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

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