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 or sectorâs growth.
Pembina Pipeline Corp. (PPL.TO) has once again achieved Favored Green status in the SIA S&P/TSX 60 Report, now positioned at 14th place, climbing 7 spots in the past quarter and 3 spots just in the past week. The stock has steadily strengthened since last fall, entering the Neutral Yellow Zone in early October 2023 when it traded at $40.
A review of its weekly candlestick chart illustrates this gradual ascent, characterized by a wedge consolidation pattern from 2021 to 2023. This pattern resolved as shares broke through the $46 resistance (now support), reaching the current level of $51.88. Since entering the Neutral Yellow Zone, the stock has appreciated nearly 40%, an impressive feat despite not matching the growth of companies like Dollarama or Constellation Software.
Notably, Pembina still offers a substantial dividend yield of 5.32% at today's price. The accumulation phase is evident from intermittent volume spikes in 2024, although current prices have seen volume taper off. Investing during pullbacks could enhance the risk/reward profile and further boost dividend yields for investors in this technical leader.
Analyzing the point and figure chart reveals three distinct upward movements following the 2020 collapse to $12.50. Consolidation throughout 2022-2023 established strong support at $37.09, serving as a base for breaking out of the wedge formation. In April 2024, the stock cleared significant resistance at $47.03, suggesting potential new resistance levels at $55.11 (vertical count) and $60.84 (horizontal count). Minor support levels are identified at the 3-box reversal of $47.03, followed by strong support at$46.11 and $44.32. Long-term support now lies at $37.09, a level considered distant barring a major market correction.
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