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.
We featured clothing retailer Aritzia, Inc. (ATZ.TO) in the January 12th edition after it climbed up out of the red zone in the SIA S&P/TSX Composite Index Report. It subsequently climbed up into the green zone for the first time since December of 2022. At its closing high of $40.17 on February 9th, it was up 25.5% from when we had mentioned it.
In recent weeks, however, Aritzia has dropped back, losing 10.8% from its high. The shares fell 30 spots in the last month to 72nd place and have fallen out of the green zone back down into the Yellow Neutral Zone.
Candlestick Chart Shows Shares Backsliding:
Aritzia (ATZ.TO) kicked off 2024 with a bang, completing a bullish Saucer Bottom that formed in late 2023 with a breakaway gap on a volume spike that was sparked by a positive earnings report. The shares continued to trend upward for several weeks, until they ran into resistance near $40.00, a round number and previous support level.
Over the last few weeks, the shares have started to backslide, falling back under their 10-day moving average. Initial support appears in the $32.00 to $32.50 area, and should that hold, this could be seen as a correction in an emerging uptrend. A close below $32.00 would signal the start of a deeper downleg that could fill in gaps down toward support around $27.50. A breakout over $40.00 would signal the start of a new upleg with next potential resistance after that at previous highs near $44.00, then a measured $47.50.
Point and Figure Chart Sends a Warning:
Aritzia started 2024 off strong with two bullish double top breakouts that combined into a bullish catapult. Earlier this month, the shares ran into resistance near $40.00 and have slipped back more than 50% of their previous X column, generating a bearish High Pole Warning.
Initial downside support appears at the January low near $32.10. A breakdown there would complete a pending double bottom breakdown, with next potential support after that at previous lows near $28.50 or $25.30 on trend. Initial resistance on a bounce appears near $38.35 based on a 3-box reversal, then the recent high near $40.90, and a prior low near $42.35.
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 5 out of 10, ATZ.TO is exhibiting short-term weakness against the asset classes.
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