Gildan Activewear Inc. - (GIL.TO) - March 21, 2024 (Daily Stock Report)


Athletic clothing producer Gildan Activewear (GIL.TO) struggled at the end of last year and the start of this year, dropping from the green zone to the red zone in the SIA S&P/TSX 60 Index Report. Since February, however, its relative strength has steadily been improving.

A month ago, GIL.TO climbed back up into the Yellow Neutral Zone from the red zone and since then it has moved up another 4 spots to 27th place. Over the last month, GIL.TO is up 12.1% while the S&P/TSX Composite Index has gained 3.9%. For the last two years, Gildan Activewear (GILTO) has been stuck in a sideways trading range between $34.00 and $51.00. Following an early 2022 retreat, GIL.TO spent over a year base building in the $35.00 to $45.00 area. Back in November, a new upswing started but it fizzled out in a December selloff.

The December retreat turned out to be a correction within an emerging uptrend as support came in near $41.00, a previous resistance level. Having established a higher low, the shares have launched upward again, particularly this week where they have rallied up off of their 10-week moving average and broken out over $50.00 once again.

Measured moves suggest the potential for upside resistance near $55.00, $59.00 or $68.00 on trend. Initial support appears at the 10-week average near $46.20.

A long-term uptrend in Gildan Activewear (GIL.TO) shares dating back to the 2020 market bottom appears to be resuming. After peaking in early 2022, the shares sold off for about six months. Since the middle of 2022, they have been steadily recovering lost ground, establishing a new uptrend of higher lows. Accumulation in Gil.TO resumed in earnest in November when the shares staged bullish Double Top, Spread Double Top and Spread Triple Top breakouts. A correction bottomed out at a higher low and only triggered a high pole warning that did not negate the previous pattern signals. More recently, the shares have completed another bullish Double Top breakout and are currently retesting their January 2021 peak.

A close above $51.75 at a new high would confirm the start of a new advance. Should that occur, next potential resistance may emerge near $60.60 based on a horizontal count, or $66.90 based on a vertical count. Initial support may appear near $46.85 based on a 3-box reversal.

With a perfect bullish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 10 out of 10, GIL.TO is exhibiting short-term strength across the asset classes.

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