In today’s edition of the Daily Stock Report, we are going to feature Chartwell Retirement Residences (CSH.UN.TO). This is the first time we have highlighted CSH.UN.TO in our daily commentary. Real Estate had been under pressure ever since interest rates began to rise in early 2022. However, in late 2023, the shift to a slightly more dovish central bank outlook triggered a trend reversal. Real Estate is a prime beneficiary of the end of rate hikes. The SIA Platform picked up on these positive money inflows into Chartwell well before the markets anticipated that the interest rate easing cycle would begin, as the shares of CHS.UN.TO regained their favored status in August 2023. This demonstrates the power of the SIA Platform and how it can provide valuable calls to action on where to look for opportunities.
Chartwell has shown consistent strength over the last little while moving up 8 spots in the last quarter in SIA’s S&P/TSX Composite Index Report. It currently sits in the Favored Zone in the SIA S&P/TSX Composite Index in the #33 spot in the report. Chartwell first entered the Favored zone on August 18, 2023, at a price of $10.48. Today the shares are at $16.71 representing a 59% increase in a little over a year and a half.
Chartwell Retirement Residences is an unincorporated open-ended trust. The company is engaged in the ownership, operation, and management of retirement and long-term care communities in Canada. It operates its retirement and long-term care facilities separately. The Retirement Operations segment consists of communities that the company owns and operates in Canada. The Long-Term Care operations segment represents approximately 19 long-term care communities in Ontario. The majority of the revenue is derived from the Canadian Retirement segment.
In looking at the Candlestick Chart, the shares bottomed in December of 2022, while the SIA AI-platform triggered a favored signal in August of 2023, and the shares have never looked back with a strong and steady uptrend of higher highs and higher lows. To put this into context, the S&P/TSX Composite index returned a positive 24.97% gain in the same time frame as the SIA favored signal on CSH.UN.TO on August 18, 2023, which gained 59%. This represents a 34.03% outperformance in CSH.UN.TO and it does not even include the 3.71% dividend yield on CSH.UN.TO. This exemplifies the concept of positioning yourself in relative outperformers at all times.
Potential resistance may emerge around the recent high of approximately $17, where a doji candlestick has formed, indicating buyer weakness and market indecision. Support can be found near the January pullback at around $15.00.
In looking at a 2% scale on a Point the Figure Chart, we see the stock has been in a steady uptrend since the bottom in January of 2023, when it finally found a floor at the long term uptrend line (green line). Prior to that the shares fell off a cliff beginning in April 2022, during the interest rate hiking cycle. Since then, we see the shares have been in a very strong and steady uptrend with the strongest uptrend beginning in December 2023 which lasted one full year with a column of 27 X’s without even a pullback. The SIA favored signal was issued 4 months prior to this in August of 2023. Since that time there has been a short pullback starting in January of this year lasting only 4 boxes of O’s.
However, in February the uptrend reasserted itself and a new high was established when it broke above the prior high at $16.33.
Resistance can now be found at $18.03 based on a measured move. Support is at the 3 box reversal of $16.01 and, below that, $14.50. With a SMAX score of 10 out of 10, Chartwell is showing near term strength against all the asset classes.
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