SIA Chartsā 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.
CargoJet Inc. (CJT.TO) returned to the Green Favored Zone in the SIA S&P/TSX Composite Index Report yesterday for the first time since October of 2020. A push upward earlier this year had faltered near the top of the yellow zone. The shares have moved up 75 spots in the last week, including a rise of 11 positions yesterday leaving the red zone and quickly driving up through the yellow zone.
Relative strength analysis also helps investors identify long periods of underperformance. From when it left the Green Favored Zone in 2020 to yesterday, the shares had declined 37.5%, while the S&P/TSX Composite Index gained 30.1%. In the last week, CargoJet is up 12.6%, while the Index is down 1.2%. A three-year downtrend in CargoJet (CJT.TO) shares bottomed out last fall and for the last six months, the shares have been building a base for recovery in the $110.00 to $130.00 range. Last week, the shares launched up off of channel support and this week, CJT.TO has broken out to the upside, confirming renewed accumulation and the start of a new uptrend.
Based on measured moves, upside resistance may emerge near the $150.00 round number, then closer to $180.00, which also coincides with a retest of previous highs. Initial support appears near the $125.00 round number.
A major breakout is underway in CargoJet (CJT.TO) shares. Since the fall of 2020, CJT.TO had been trending downward but appears to have bottomed out in a selling climax last fall. Following an initial recovery rally, the shares consolidated for four months. This month, the shares have broken out of the upside, completing bullish Double Top and Spread Double Top patterns, and snapping an intermediate downtrend line. Initial upside resistance at a long-term downtrend line near $138.80, followed by $156.35, which is based on a horizontal count and $169.20, on a vertical count. Initial support appears near $123.25 where a 3-box reversal and a retest of a recent breakout point converge.
With a 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, CJT.TO is exhibiting short-term strength across the asset classes.
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