Rogers Communications Inc. (RCI.B.TO) serves as an excellent example of the effectiveness of the SIA Platform and its rules-based methodology, which prioritizes high relative strength names over those with poor SIA technical attributes. It is often said that SIA Charts’ relative strength rankings assist advisors in identifying opportunities in stocks that are outperforming their peers or index benchmarks on a relative basis. Outperformance typically reflects improving investor expectations for a company's or sector’s growth. Conversely, underperforming stocks may indicate deteriorating investor expectations, as seen with RCI.B.TO. Shares of RCI.B.TO have declined by 33.27% over the past year, representing a dismal performance by any benchmark. This could have been avoided by excluding this underperformer from a portfolio in favor of other constituents from the SIA S&P/TSX 60 Index, particularly those ranked higher in the favored green zone of the report. For those utilizing point-and-figure charting without incorporating SIA relative strength analysis, there have been several instances where it appeared that supportive levels were forming, only for the stock to take another leg downward. Shares are down 22.72% over the past quarter and 9.99% over the past month alone. For those who positioned into RCI.B.TO or other Canadian telecom stocks, it is helpful to examine the point-and-figure chart supporting the purchase plan. A key SIA technical attribute is the stock’s continued presence in the Unfavored (red) zone, as indicated by the SIA matrix position overlay tool, which shows its unfavorable position within the SIA S&P/TSX Index Report. A list of all SIA reports for Rogers is also displayed, showing its unfavored status since 2018. A marked improvement in SIA relative strength would be necessary for rules-based advisors to consider RCI.B.TO, where resistance is significant. The first level of resistance is the 3-box reversal at $44.43, followed by a zone of heavy resistance between $48.09 and $49.05, which also aligns with the psychological level of $50. Fortunately for current holders of RCI.B.TO, a new level of support is approaching at $39.45, along the long-term trend line, with another support level at $34.35 should the long-term trend be broken.
From a candlestick perspective, the last four monthly candles on the chart are notably bearish. Shares have decisively fallen below the $44 level of support and are approaching new support at $39, with additional support at $34-$35. Resistance is clearly marked at the previous support level of $44, with further resistance at $53, and possibly up to $60, where sellers may be eager to exit this multi-year underperforming investment. From a near-term perspective, when compared against other asset classes via the SIA SMAX score, there is zero relative strength with a 0/10 rank. There is little to discuss regarding Rogers Communications until its readings improve, but this scenario could easily have been avoided through adherence to the SIA rules-based methodology. For advisors interested in learning more about how this approach works, additional training is available. Account managers are always available to assist advisors in integrating the software into their practice and sharing best practices observed from elite SIA practitioners.
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