Brookfield Corporation is a Canadian multinational company and one of the world's largest alternative investment management firms, with over $925 billion in assets under management. The company focuses on direct control investments in real estate, renewable power, infrastructure, credit, and private equity. From a stock perspective, shares of Brookfield Corp. (BN.TO) have been a relative underperformer, with a 3-year rate of return of only 5.48%. However, this trend seems to be reversing as the shares are climbing the SIA relative strength matrix, now positioned at #16 in the Neutral Yellow Zone of the SIA S&P/TSX 60 report. The year-to-date (YTD) rate of return stands at 25.97%, nearly double that of the Equal Weight S&P/TSX 60 Index Fund (EWIXIU.TO), which has returned only 12.01%. Examining the candlestick chart set to a monthly view, we see that BN.TO shares are breaking out to new highs at the $62 level. This former resistance level now serves as solid support for any further upward movement. Additional support is anticipated should shares trade down to the $56 level on the 2024 trend line, outlined in light grey. In the event of a significant market selloff, the $42 level, reflecting fair value since 2020, would likely act as a safety net. BN.TO currently holds a perfect SMAX score of 10 out of 10, indicating strong short-term performance relative to other asset classes.
Further insights come from the Point and Figure chart, which shows a consolidation flag formed from 2021 to late 2023, highlighted by two black lines and the grey arrow at the $47.97 level. Shares rallied through 2024 until hitting the top-line resistance at $62.05, where they entered a period of price discovery. This consolidation phase appears to be nearing its end, as the P&F chart completed a spread triple top at $62.05, reversed into a column of O’s, and is now setting up for a catapult formation. A P&F catapult formation, characterized by a strong upward breakout following a consolidation phase, signals a powerful and sustained price advance. This is significant on its own, but in the context of our main gauge, relative strength, it sets the stage for an exciting fall session. We have established zone alerts for Brookfield's entry into the coveted Favored Green Zone of the SIA S&P TSX 60 Index Report, as well as for the $68.51 level, which will confirm the P&F catapult formation.
Resistance appears at the $81.87 level with more at $92.20 (based on a vertical count of prior consolidations ranges) as it sets eyes on the whole number $100.
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