Multinational banking and financial services operator Canadian Imperial Bank of Commerce (CM.TO) has recently attracted the attention of SIA practitioners with its steady ascent up the relative strength matrix over the past 12 months. As of yesterday’s close, CM.TO has entered the Favored Green Zone of the SIA S&P/TSX 60 at position #15, with a closing price of $79.60. SIA Charts’ relative strength rankings help investors identify stocks outperforming their peers or index benchmarks. This tool has proven invaluable for advisors, as outperformance in these evaluations often reflects improving investor expectations for company or sector growth, which is currently the case with CM.TO. The stock is already up 28.16% year-to-date and has a 5-year return of 15.41%, demonstrating the freshness of its performance in the SIA relative strength report. CM.TO also boasts a beta of 1.26 and a current yield of 4.52%, offering an added bonus for income and growth investors. It is noteworthy that major Canadian banks had been absent from the SIA S&P/TSX 60 Index Report for some time, so CM.TO’s inclusion is significant, aligning with earlier movements observed in the SIA S&P 100 Index Report. The attached candlestick chart, dating back to 2021, shows that CM.TO had been stuck in a sideways consolidation range (pink oval) for nearly two years but finally broke out in January 2024 after surpassing the $63 level. With buyers now in control and shares valued at $79.60, CM.TO has a perfect SMAX score of 10 out of 10, highlighting its strength relative to other asset classes, including bonds, cash, domestic and international equities, and commodities.
Turning to SIA's point-and-figure chart, the consolidation range is depicted as a flag, with breakout points initially at $57 and further confirmations at $66.54 and $73.47, now serving as support levels. Resistance is set at $89.56, with additional resistance at $100.86, determined from both vertical and horizontal counts of the prior consolidation range and breakouts. The $100.86 resistance level aligns with a psychological whole number, which often acts as a significant barrier for investors. For new SIA practitioners who sometimes ask how to invest in stocks like Eli Lilly, Nvidia, and Costco after substantial rallies while they are in the SIA Favored Zones, we understand it can be challenging to build confidence. We encourage you to continue developing this skill and, in the meantime, consider new opportunities and latest entrants. To illustrate, we used the SIA Relative Strength Matrix Position Tool to track CM.TO's relative moves over time. Our arrow points to the top of the latest column, and the Green X marks the new Zone Alert that occurred after yesterday's update. If you would like to discuss this further please remember to reach out to your personal SIACharts Agent, we are always keen to assist with these Alerts and Automation best practices.
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