On Friday, we explored the strong performance of the automotive sector, and today, we turn our attention to another sector showing potentialāutilities. Currently, the utilities sector sits in the neutral zone of the SIA sector matrix, having moved up 5 spots in the past week and 3 spots in the past month. This makes it the second-largest relative strength gainer last week, especially as many stocks and sectors were experiencing high volatility. As the dust settles after a challenging week, the SIA platform has identified utilities as a sector to watch. In particular, one name stood out: Emera Inc. (EMA.TO). Headquartered in Halifax, Nova Scotia, Emera Inc. is a diverse energy and services company that serves approximately 2.5 million utility customers across Canada, the U.S., and the Caribbean. Established in 1998 during the privatization of Nova Scotia Power, Emera's shares currently sit in the unfavored zone of the SIA S&P/TSX 60 index report. However, they have moved toward the neutral (yellow) zone over the past few weeks, following the broader trend in the utilities sector. Over the past month, shares of EMA.TO have risen by 8.17%, and by 12.61% over the past quarter, outperforming the iShares S&P/TSX 60 Index ETF (XIU.TO), which posted a performance of -0.03% and 0.24% over the same periods.
The attached point and figure (PNF) chart, scaled at 2% for an investment-grade technical review, reveals some key details that are not immediately apparent in traditional line charts. The chart shows a breakout above a seven-year consolidation range, with resistance at $54.70, a level the stock failed to surpass multiple times. With the stock moving past $55.79, EMA.TO may be entering the early stages of a multi-year breakout. The PNF target suggests initial upside potential to $62.83, with even higher targets at $76.59, based on a point and figure count from the previous consolidation range. Support is relatively tight, with the 3-box reversal level at $52.57, followed by additional support at $50.53 and $47.62. Currently, Emera Inc. holds an SIA SMAX score of 9/10, underscoring its relative outperformance compared to a basket of other asset classes.
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