SIA Chartsā relative strength rankings assist investors in identifying stocks that are outperforming their peers or index benchmarks. Outperformance typically indicates positive investor expectations for a company or sector, while underperformance can signal the opposite, which is equally significant. To illustrate this, letās review the shares of Nutrien Ltd. (NTR.TO). Recently in the news, Saskatoon-based Nutrien reported second-quarter earnings of US$392 million, down from US$448 million a year earlier, with sales also declining by $1.5 billion, primarily due to lower fertilizer prices and a loss on foreign currency derivatives. This resulted in a 15% miss on diluted earnings per share, which came in at 78 cents compared to 89 cents a year ago. While Nutrien is not a position we hold in our models, it provides an excellent opportunity to demonstrate how it aligns with the SIA relative strength matrix and our powerful AI platform. Examining Nutrien through the SIA relative strength matrix, we find the shares deeply entrenched in the Unfavored Red Zone of the SIA TSX/S&P 60 Index Report. The shares exited the Favored Green Zone in November 2022 after a significant weekly pullback that breached the $100 support level. By summer 2023, Nutrien had slipped to the lowest position in the RS matrix (#61). Although there were some short-term countertrend rallies between 2023 and 2024 that might have seemed like a recovery, they lacked follow-through in the relative strength matrix and remained within the Unfavored Red Zone. Each rally was accompanied by distribution, and the stock has lost another $40 per share since leaving the Favored Green Zone, even as the broader stock market rallied. Turning to the candlestick chart with the SIA report position overlay tool, the stockās decline aligns with its relative performance. The chart highlights periods of favorability and unfavorable performance with double arrows and shows high volume during the downtrend, indicating that bears continue to control the stock. Notable resistance is now at $75, with long-term support at $58. This chart effectively demonstrates the power of relative strength investing, and we hope it underscores the value of SIACharts in your practice. For further insights, consider signing up for a 3-week trial, where our account managers will provide personalized training and assist in customizing our tools for your needs.
Now, letās explore Point and Figure charts, which excel at clarifying price trends by filtering out minor fluctuations and focusing on significant price movements. This method highlights key support and resistance levels, aiding in the identification of potential breakouts and reversals. The P&F chart for NTR.TO effectively shows the downtrend, characterized by numerous double and triple bottom breakdowns. Attempts to rally were met with distribution, particularly along the red negative trend line. Long-term support is evident at $48.57, dating back to 2021, though this is 25% below current prices. Additional weaker support exists at $60.39 and $55.79. Resistance is strong at $81.28 (negative trend line), with additional resistance at $87.98. With a SMAX score of 1 out of 10, indicating near-term performance against various asset classes, Nutrien shows minimal short-term performance compared to other asset classes.
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