Building further on the analysis in the Equity Leaders Weekly, we will highlight the difference that relative strength can make in your portfolio management decisions. The first priority is to keep your holdings far away from negative surprises, which often manifest as relative underperformance before the big drop occurs. Once these underperformers are avoided, portfolios can be positioned to take advantage of positions that are outperforming the market—assuming that is the ultimate goal. The first attachment includes twin SIA Matrix Position charts for both Walmart (WMT) and Target (TGT), which clearly show Walmart's consistent relative outperformance, while Target is a "slow-motion train wreck" due to its ongoing underperformance. This is significant, as relative underperformance often signals weak growth expectations for a company or sector and should be respected. Turning to the point and figure chart of Walmart, we’ve engaged the matrix position overlay tool, which shows SIA practitioners where WMT shares are located over time within the SIA Matrix Report, specifically the SIA S&P 100 Index Report. This chart reveals a breakout from a zone of low relative performance (highlighted in a red oval) that began in late 2023 and gained momentum in 2024. This relative outperformance, identified by the powerful SIA platform, manifested into an absolute outperformance with a 76.56% gain that is now in the rearview mirror for savvy, disciplined SIA advisors. Having run so far, so fast, the trading range has widened, with support now visible at $88.01 and $77.33, and resistance at $101.16 (near the $100 whole number), with further resistance at $110.64, based on a vertical and horizontal count of the prior consolidation range from 2021-2023.
Next, turning to Target, we find it to be a serious underperformer in the SIA S&P 100 Index Report, as shown in the matrix position chart where the relative reading continues to slide throughout 2023 and into 2024, never once giving any SIA Rules-based favored signals and keeping portfolio managers away from this underperformer. To further illustrate this situation, we’ve added a point and figure chart for Target (TGT), where a red oval highlights both the overhead resistance now clouding the TGT trade and the multi-year red readings coming from its low rank within the SIA S&P 100 Index Report. These signals show that there was never any reason to own the position for those attempting to beat the broad market. Additionally, a box lists all the reports in which TGT is a member within the SIA platform, further confirming its low rank and supporting the decision not to own it. Resistance levels are shown at $146.54 and $131.34, while support levels are at $121.29, $112.01, and $100.40, which coincidentally aligns with the psychological whole level that often holds significance for market participants. Meanwhile, TGT shares hold an SIA SMAX score of just 1 out of 10, meaning it is underperforming many other asset classes, including cash and bonds.
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