SIAChartsā Relative Strength rankings not only help investors to identify which stocks in a universe are outperforming and underperforming against their peers, but also when relative performance trends are changing.
On Friday, Uranium producer Cameco (CCO.TO) dropped out of the green zone and into the Yellow Neutral Zone of the SIA S&P/TSX 60 Index Report, falling 4 spots on the day and 13 positions in the last month to 16th place.
Cameco had been in the green zone since May and over the last nine months, it had returned 48.7%, compared with a 7.4% gain over the same period for the S&P/TSX Composite Index.
Candlestick Chart Tests a Key Support Level:
Six months of steady accumulation in Cameco (CCO.TO) shares appears to be ending. Earlier this month, the shares peaked near $68.00 for a second time, completing a bearish Double Top Failure, indicating significant resistance near that level. Since then, support has faltered and bears have gained the upper hand, knocking the shares back under their 10-week moving average, snapping an uptrend line, and pushing the shares down toward a retest of $56.00, a key support/resistance point in recent months.
A close below $56.00 would confirm the start of a new downtrend. Should that occur, next potential support may appear in the $48.00 to $50.00 range between a measured move and a round number. Initial upside resistance appears at the 10-week moving average near the $60.00 round number.
Point and Figure Chart Breaks Down:
Cameco shares (CCO.TO) steadily advanced through 2023, more than doubling between their December 2022 low and January 2024 peak. It now appears, however, that Cameco has peaked for now and come under distribution. Earlier this month, the shares ran into resistance at a lower high for the first time in over a year. Last week, the shares broke down below $60.00 and completed a bearish Double Bottom pattern, signaling the start of a new downleg.
Initial downside support may appear near the $50.00 round number, followed by a previous low near $48.90 and then $47.00 which is based on a horizontal count. Initial resistance appears near $62.00 based on a 3-box reversal and a retest of a recent breakdown point.
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 4 out of 10, CCO.TO is exhibiting short-term weakness against the asset classes.
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