SIA Chartsā relative strength rankings help investors manage risk by identifying stocks and sectors which are underperforming or starting to underperform on their own or alongside their sector indicating that capital is moving elsewhere.
In recent weeks, Leisure stocks in general, and some Restaurants in particular have started to struggle relative to other sectors, a sign that high inflation and interest rates may be impacting consumer spending. Restaurant Brands International (QSR.TO) dropped out of the green zone of the SIA S&P/TSX 60 Index Report in February then spent six weeks sliding down through the yellow zone.
The shares have been in the Red Unfavored Zone since the beginning of April and are currently in 40th place. Since entering the Red Unfavored Zone, the shares are down 4.5%, while the S&P/TSX Composite Index has climbed 1.9% over the same period.
Candlestick Chart Completes a Bearish Descending Triangle.
Recent trading suggests that an uptrend in Restaurant Brands International (QSR.TO) peaked back in February and since then, the shares have come under increasing distribution. Over the last two months, a downtrend of lower highs has emerged, and the shares have not only broken their 10-week moving average near $101.00 and the $100.00 round number, both of them have been retested as new lower resistance.
Most recently, QSR.TO has broken down below $98.00, which completed a bearish Descending Triangle pattern and confirmed the start of a new downtrend. A measured move suggests next potential downside support may appear near $86.00, followed by $83.00 based on previous lows.
Point and Figure Chart Turns Downward.
This 1% chart highlights how a big uptrend in Restaurant Brands International (QSR.TO) shares peaked back in March near $110.00. Since then the shares have been trending back downward staging two bearish Double Bottom breakdowns in a row, signaling the start of a new downtrend.
Next potential support appear near $94.00 at a prior low, then the $87.65 to $84.25 area where previous highs and lows, along with vertical and horizontal counts cluster. Initial resistance on a bounce appears between the $100.00 round number and $100.75 based on a 3-box reversal.
With its bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 4 out of 10, QSR.TO is exhibiting short-term strength weakness against the asset classes.
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