SIA Chartsâ relative strength rankings help investors manage risk by identifying stocks and sectors which are relatively underperforming in the short or long term to potentially be avoided as capital appears to be seeking better opportunities elsewhere.
Canadian National Railway (CNR.TO) dropped out of the green zone in the SIA S&P/TSX 60 Index Report back in October of 2020 and has spent nearly all of the last four years bouncing around between the red and yellow zones. Since early 2023, most of that has been in the Red Unfavored Zone.
Earlier this year, CNR.TO tried to move up in the rankings but since rolling back down in March, it has been stuck in the Red Unfavored Zone finishing yesterday in 37th place. Since dropping out of the yellow zone, the shares are down 8.6%, while the S&P/TSX Composite Index is flat.
Since peaking back in April near $180.00, accumulation in Canadian National Railway (CNR.TO) shares has shifted from accumulation to distribution. A new downtrend of lower highs has emerged and two weeks ago, the shares completed a bearish Double Bottom pattern in a jump in volume, signaling an increase in selling pressure.
Currently, the shares are testing support near $160.00, a former resistance level that has reversed polarity. Should that hold, initial resistance on a bounce would appear near the $168.00 breakdown point. Should that fail and the shares break down again, it would confirm the start of a new downtrend with next potential support near $150.00 where an uptrend support line aligns with a round number, then the October lows in the low $140s.
Late last year, Canadian National Railway shares retested a previous low then launched into a nice recovery trend, completing a series of bullish patterns and rallying through to April. In recent months, support has eroded, however and the shares have turned back downward, establishing a new downtrend of lower highs and completing a bearish Double Bottom breakdown.
Initial downside support appears near $156.45 based on a retest of a previous breakout point, followed by the $150.00 round number, $144.50 based on a horizontal count, and the October low near $141.65. Initial resistance on a bounce appears near $167.75 based on 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 4 out of 10, CNR.TO is exhibiting short-term weakness against the asset classes.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
