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. Shares of Canadian Tire Corp have been under continued distribution for the past several years and are currently upon vulnerable support along its long-term trend line.
The shares have been residing in the Red Unfavored Zone of the SIA S&P TSX 60 report and are currently buried at position #53 of 60.
Once the darling of the Canadian stock market, shares of CTC.A.TO began to underperform the market in late summer of 2021 from highs of $176 as the shares entered the Yellow Neutral Zone and quickly descended into the Unfavored Red Zone.
Since this time the shares have declined $39/share and posted losses of -22% vs. a gain of +11% for the S&P TSX Composite over the same time frame.
Upon first inspection of the candlestick chart, it appears that support was broken in May month (red circle) when the shares declined below $130 support, but the Point and Figure chart that follows picks up on this nuance nicely as it hugged the long-term trend line and is still holding up well on support, for the now.
This is another reason we like to use the candlestick charts in conjunction with the point and figure charts as the latter tends to measure trend lines so much more precisely.
That said, CTC.A.TO is not out of the woods yet as relative strength is still extremely poor and the zone of support at $131.01 level is currently being heavily challenged.
A break of this support level would find next support just under $115 and further at $110.
To the upside, resistance is heavy at $145 and further resistance stacks up at $160 and $180.
Turning now to the point and figure chart we see these resistance and support levels a little more clearly especially the long-term trend line that is currently under attack at $131.01.
Any continued selloff will be confirmed with the break of trend and a double bottom breakdown at $125.92 with the only support at the $114.05 level and more at $91.73.
To the upside there is resistance at the three-box reversal and prior column of Xās at $144.64 with more significant resistance at $159.70 and $183.44 should a measured rally materialize.
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 2 out of 10, CTC.A.TO is exhibiting short-term weakness across the asset classes.
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