SIA Chartsâ relative strength rankings help investors manage risk by identifying stocks and sectors which are underperforming or starting to underperform relative to their peers and/or their benchmarks indicating that capital is moving elsewhere.
The five-year relative strength chart shows that credit card company Visa Inc. (V) has not been able to stay in the green zone of the SIA S&P 100 Index Report for more than a few days since September of 2020, making it a long-term relative strength underperformer.
Itâs last attempt to climb up the rankings peaked back in November and since then, Visa has been steadily drifting downward. In the last month, the shares have dropped 9 positions to 57th place, returning to the Red Unfavored Zone for the first time since January of 2023. Over the last three months, Visa is down 3.5% while the S&P 100 Index is up 12.0%. An uptrend in Visa (V) shares which had started in the fall 2022 market bottom appears to have peaked back in March when a rally up toward $290.00 failed with a bearish Shooting Star candlestick, marking the peak. Since then, the shares have been in steady retreat, establishing a new downtrend of lower highs.
Two weeks ago, V broke down below $265.00, completing a bearish Descending Triangle pattern, on a spike in volume, indicating an increase in selling pressure. The start of a new downtrend would be confirmed by a close below $260.00 which would snap the last remaining support line of the longer-term uptrend.
Potential downside support may emerge near the $250.00 round number, followed by $240.00 based on a measured move from the triangle, and then previous support near $230.00. Initial rebound resistance appears near $273.00 based on a retest of the 10-week moving average.
A rally in Visa (V) shares peaked back in March and since then, they have come under distribution. Following an initial pullback, the shares settled into a lower range through the spring. This month, selling pressure has intensified and Visa has embarked on a new downleg, completing bearish Double Bottom and Spread Double Bottom breakdowns.
Next potential support appears near $244.60 where a vertical count converges with a retest of a previous breakout point. Horizontal counts suggest potential support near $239.60 and $232.75. Initial resistance on a rebound appears near $275.65 based on a 3-box reversal.
With a Bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 5 out of 10, V is exhibiting short-term weakness against the asset classes.
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