SIA Charts’ relative strength rankings assist investors in identifying stocks and sectors that are outperforming or underperforming their peers or benchmark indices. Underperformance may signal weakening investor expectations for a company or sector. The rankings help identify not only which stocks are lagging within a given universe, but also when relative performance trends may be shifting. In today’s Daily Stock Report, focus turns to Thomson Reuters Corp (TRI.TO), which has experienced notable relative underperformance in recent months. The name serves as an example of how remaining cautious toward stocks in the red Unfavored Zone may help avoid exposure to names that tend to lag broader market performance.
Thomson Reuters entered the red Unfavored Zone in the SIA S&P/TSX Composite Index on August 6, 2025, at a price of $247.36, indicating a potential need to look toward stronger relative opportunities. Since that time, the shares have remained in the Unfavored Zone and currently sit near the bottom of the ranking at position 210 out of 219. Over the past month, the stock has declined by 13 positions, and over the past quarter by 14 positions, closing most recently at $181.92. Since entering the Unfavored Zone, the shares have declined by 26.88%, while the broader S&P/TSX Composite Index has risen 14.13% over the same period. This divergence highlights how relative strength analysis may help identify areas of potential underperformance and guide allocation away from weaker names.
Reviewing the candlestick chart, the shares appear to have encountered resistance near the $290 level in mid-July. On August 6, the same day the stock entered the Unfavored Zone, a large bearish candlestick formed as the shares declined by more than $30 following the release of second-quarter results. While such sharp declines can sometimes attract contrarian interest, they may also reflect underlying weakness. Since that point, the shares have continued to trend lower, forming a pattern of lower highs and lower lows. This type of price action can indicate sustained downside pressure rather than a short-term dislocation.
More recently, the shares appear to have moved sideways near the $180 level, suggesting a possible pause in the decline. However, the broader trend remains downward at this stage. This example highlights how maintaining a disciplined, rules-based approach and avoiding names in the red Unfavored Zone may help reduce exposure to prolonged periods of underperformance.
A review of the Point and Figure chart using a 2% box size provides additional insight into potential support and resistance levels. One benefit of this approach is its ability to highlight key inflection points with greater clarity. The shares have exhibited a sharp decline, marked by two significant downward columns of Os, one spanning 16 boxes during September and October and another currently extending 12 boxes. This price action reflects sustained selling pressure over multiple periods.
Looking ahead, the shares are approaching an important support level near $175.95. A failure to hold this level could open the door to additional downside, with the next area of potential support located between $153.15 and $156.22. On the upside, should the shares begin to stabilize, initial resistance appears near the 3-box reversal level at $194.24. Further resistance may be encountered at $202.08, which represents a 50% retracement of the most recent downward column of Os. At present, the shares exhibit a bearish Double Bottom pattern and carry an SMAX score of 0 out of 10, indicating very weak short-term relative performance versus other asset classes.
Thomson Reuters provides information services and technology solutions to professionals across legal, tax, accounting, compliance, government, and media sectors. Its offerings combine specialized software, data, and analytics designed to support informed decision-making and institutional operations. Reuters, a division of Thomson Reuters, delivers global news coverage focused on accuracy, independence, and insight.
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