DAILY STOCK REPORT: ARITZIA INC (ATZ.TO)
Abrupt changes in rankings within SIACharts reports can flag to investors significant changes in investor sentiment. Clothing retailer Aritzia (ATZ.TO) jumped 90 positions within the SIA S&P/TSX Composite Index Report yesterday, leaving the red zone and climbing up into the upper half of the Yellow Neutral Zone. This run up the rankings was driven by a 21.0% gain in the share price yesterday on the back of a surprisingly positive earnings report.
Aritzia had struggled in the relative strength rankings for much of last year. It dropped out of the green zone in December of 2022, and entered the red zone almost a year to the day from its exit. The shares spent much of the summer at or near rock bottom but had started to climb within the red zone starting in mid-October. Prior to yesterday’s rally the shares had been down 47.3% over the year they spent in the red zone, compared with a 5.25% gain for the benchmark index ETF over the same period. Candlestick Chart Breaks Out of a Base:
A major breakout is underway in Aritzia (ATZ.TO) shares. From the fall of 2020 through to last summer, the shares were under distribution, the worst of which came in a big washout drop on a spike in volume back in July. Aritzia then spent the rest of last year bottoming out and forming a saucer bottom base for recovery and a bullish Ascending Triangle. This week, accumulation appears to be getting underway in earnest with the shares breaking out of their base and out of a downtrend on a spike in volume.
Previous highs suggest potential resistance may emerge near $37.00 and $44.00 on trend, along with the $40.00 round number. Initial support appears near the $30.00 round number.
Point and Figure Chart Turns Back Upward:
A year-long downtrend in Aritzia (ATZ.TO) shares bottomed out in a Bear Trap back in October, when they broke down by one row then reversed upward. Since then, an uptrend of higher lows has emerged, and the shares have completed a series of bullish Double Top breakouts. Yesterday, the shares rallied to their highest level since July, a sign of continuing accumulation.
Initial upside resistance tests appear in the $36.15 to $39.10 range where column highs/lows, a horizontal count and a downtrend line cluster, followed by $40.70 based on a vertical count. Initial support appears near $29.05 based on a 3-box reversal.
With a bullish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 7 out of 10, ATZ.TO is exhibiting short-term strength against the asset classes.
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