At SIA Charts, we compare head-to-head battles of thousands of stocks, commodities, mutual funds and exchange traded funds daily and rank them by who is winning the most in their respective universes. The top 25% are considered the Green Favored Zone, 26-50% make up the Yellow Neutral Zone and the bottom half of each league table is considered the Red Unfavored Zone.
Sometimes stocks underperform their peers when they are in decline, and sometimes they underperform because they are flat in a rising market. Grocer Metro Inc. (MRU.TO) has been out of the green zone of the SIA S&P/TSX 60 Index Report since July of 2022. Over that time, the shares are down 2.5%.
Metro climbed up the rankings and out of the Red Unfavored Zone between March and October, but as North American equities have rallied over the last month, MRU.TO has sunk back into the Red Zone. On Friday, it finished in 33rd place, down 3 spots on the week and down 8 positions in the last month. The balance of power in Metro Inc. (MRU.TO) appears to have shifted from accumulation to distribution over the last few months. The slope of a long-term uptrend of higher lows started to slow in the summer of 2022, but otherwise remained intact well into 2023. In the spring, the shares set a final higher high near $78.00.
Since then, they have started to drift downward, establishing a lower high about a month ago suggesting a new downtrend was starting. This month, the shares have snapped an uptrend line and dropped below $69.00 confirming that the price continues to erode and a new downleg has started.
Next potential downside support appears near $60.00 where a measured move and a round number converge. Initial resistance appears at the 10-week average near $71.00, then a downtrend line near $74.00.
Over the last number of years, the pace of accumulation in Metro Inc. (MRU.TO) shares has slowed from a near vertical ascent, to a moderate but quite consistent rise, to flat-line consolidation this year in a sideways range between $69.00 and $78.00.
Currently, the shares are testing the bottom of this range. A close below $68.00 would complete a bearish pending triple bottom pattern and signal the start of a new downtrend. Should that occur, next potential support tests may appear at previous lows near $64.10, or $55.80 based on a horizontal count. Initial resistance appears near $75.10 based on a round number test and a 3-box reversal.
With a bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 2 out of 10, MRU.TO is exhibiting short-term weakness against the asset classes.
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