BMO SIA FOCUSED NORTH AMERICAN EQUITY FUND (ZFN.TO) Since the beginning of this year, the BMO SIA Focused North American Equity Fund (ZFN.TO) has been consistently climbing. The Fund utilizes SIA relative strength analysis tools at the macro, sector and individual security level to seek out opportunities and manage risk for a concentrated, active portfolio of 15-20 North American equity holdings. Chipmaker Broadcom* (AVGO) provides an example of how relative strength analysis can identify long-term outperformers (and underperformers) relative to their peers.
Since December of 2022, following a run up from the red zone, Broadcom has consistently been in the Green Favored Zone of the SIA S&P 100 Index Report. Over that time, the shares have gained 212.8% compared with a gain of 41.3% for the S&P 500 Index. In the last month, Broadcom is up 25.5% compared with 4.1% for the Index.
Yesterday’s 12.2% earnings and stock split driven rally enabled the shares to climb another 3 positions in the SIA S&P 100 Index Report to 2nd place near the top of the Green Favored Zone.
Broadcom* (AVGO) shares have consistently been under accumulation since the end of 2022. Over the last eighteen months, the shares have steadily advanced in a step pattern of rallies followed by periods of consolidation at higher levels.
From March to early June, the shares were been in a consolidation phase, but continuing higher lows have indicated that underlying accumulation remained intact. More recently, the shares have staged two bullish Double Top breakouts with only a 3-box correction between them, which have combined into a Bullish Catapult. With the shares rallying to new all-time highs, it appears that a new upleg has started.
A cluster of vertical and horizontal counts suggests next potential resistance may emerge in the $1,825 to $1,900 zone, followed by the $2,000 round number. Initial support appears near $1,525 based on a 3-box reversal, then the $1,500 round number.
With its perfect 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, AVGO is exhibiting short-term strength across the asset classes.
*Shares of Broadcom are held in some portfolios managed by SIA Wealth Management.
BMO SIA FOCUSED NORTH AMERICAN EQUITY FUND (ZFN.TO) ZFN.TO ETF units are up 22.6% Year to Date, compared with a gain of 13.92% for the S&P 500 Index and a gain of 3.53% for the S&P/TSX Composite Index so far in 2024. At the end of May, the largest weighted sectors within the fund were Information Technology, Industrials, Consumer Discretionary and Energy.
Today’s featured holding, Broadcom* Ltd. (AVGO) has been consistently held in the fund since January of 2023. It has been in the news this week around the announcements of quarterly earnings and a 10 for 1 stock split.
*Shares of Broadcom are held in some portfolios managed by SIA Wealth Management.
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