SIA Chartsâ relative strength rankings help investors identify opportunities in stocks which are outperforming their peers or index benchmarks on a relative basis. Outperformance often reflects improving investor expectations for strong company growth.
With the price of Gold soaring to new all-time highs, gold and silver streaming stocks have been climbing in relative strength rankings as well. Today, we are going to look at Wheaton Precious Metals (WPM.TO) which we last commented on January 23, 2024, when the shares fell out of the Favored Zone into the Neutral Zone and further to the Red Zone on the SIA S&P/TSX 60 Index earlier this spring. Now the shares have clawed its way back into the Favored Zone of the TSX 60 Index. Yesterday, WPM.TO finished in 15th position, up 3 spots on the week and up 36 places in the last month. Over the last month, the shares are up 18.83%, compared with a gain of 0.32% for the TSX 60 Index. In looking at the attached Candlestick chart of Wheaton Precious Metals, we see that the shares trended sideways over the last 4 years since May of 2020 between a channel top of $72.00 and a channel bottom at $40.00. However, in the past year, a higher sideways trading range materialized between a top of $70.00 and a bottom of $52.00. The shares successfully found support at the $52.00 area three times in January, September of last year and February of this year forming a nice Triple bottom pattern. The shares have picked up stream since February and charged higher and is currently at an important inflection point where it is testing its May 2020 and All-Time High of $72.00. It will be interesting to see going forward if we see any follow through strength on the shares and the shares can break above this key area of resistance and establish fresh all-time highs. If the follow through strength does materialize, the next area of resistance could be seen at the $88.00 area based on a measured move. Support can be found at the $63.00 area.
In the attached Point and Figure Chart at a 2% Scale, we see the shareâs strong rally starting in 2018 before finding a top in August of 2020. Since then, a downtrend materialized up until the bottom in September of 2022 when the accumulation phase took over and the trend reversed to the upside. A pause or sideways consolidation ensued for the better part of 2023 and early 2024. However, most recently, the shares really accelerated starting this month with a column of 14 Xâs without even a 3-box reversal. It is currently approaching the August 2020 high of $72.22 which is a key resistance point. It would be interesting to see if the shares can follow through a bit more and close above $73.67 (another 2 Xâs) to minimize the possibility of a bull trap. If the follow through strength increases, the next area of resistance is $82.96 and $93.43 based on measured moves. Support can be found at its 3-box reversal of $65.41 and, below that, $61.64. The shares currently exhibit at bullish Spread Double Top pattern. With a bullish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 9 out of 10, WPM.TO is exhibiting short-term strength against the asset classes.
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