In today’s edition of the Daily Stock Report, we are going to feature Loblaw Companies (L.TO). This is the first time we have looked at Loblaw in over 2 years. With the growing market uncertainty growing over the last quarter, money flows are migrating towards defensive names such as a tried and true Consumer Staple such as Loblaws. The SIA Platform picked up on this
positive money inflows well before the markets started to become challenging showing the power of the SIA Platform and how you can get valuable calls to action on where to look for opportunities. Loblaw has shown consistent strength over the last little while moving up 3 spots in the last month and 1 spot in the last quarter in SIA’s S&P/TSX 60 Index Report. It currently sits in the Favored Zone in the SIA S&P/TSX 60 Index in the #10 spot in the report. Loblaw first entered the Favored zone on Jan 11, 2024, at a price of $129.82. Today the shares are at $187.43 representing a 44% increase in a little over a year Loblaw is one of Canada's largest grocery, pharmacy, and general merchandise retailers, operating the most expansive store footprint in Ontario and maintaining sizable presences in provinces like Quebec and British Columbia. Key grocery banners include Loblaw, No Frills, and Maxi, while its pharmaceutical operations are the product of its 2014 acquisition of Shoppers Drug Mart. The firm carries a robust private-label assortment, with top sellers like President's Choice and No Name.
In looking at the Candlestick Chart, we see the stock has been in a steady uptrend since January of 2024. Prior to that the shares consolidated sideways for over a year and a half in a tight range of $100.00 to $120.00. The SIA AI platform triggered a favored signal at a price of $129.82 in January of 2024 and the shares have never looked back until the beginning of this year where a tight consolidation has materialized once again. However, in putting this into context, on a shorter term perspective since the trade wars and subsequent market volatility really stated to escalate here in the past month the shares have still held up admirably with a one month return of +5.38%
compared to the one month trailing performance return of the S&P/TSX60 of negative -3.75%, representing a 9.0% outperformance in these challenging markets.
Support can be found at the $175.00 area where the price had pulled back last month before an uptrend reasserted itself. Potential resistance can be forthcoming at the recent high of approximately $195.00 which very closely coincides with the $200 round number and psychological resistance.
In looking at a 2% scale on a Point the Figure Chart, we see the shares have been in a very strong and steady uptrend of a column of rising X’s since its January 2024 break out of its sideways consolidation range at the $127.67 price. Since that time there has not even been a 3 box reversal indicting a strong and steady uptrend in place up until Dec of last year when another sideways consolidation has formed just as the markets began its challenging phase. Resistance is at $196.84 which is its recent high and very closely coincides with $200 round number and psychological resistance. If it manages to break above the $200 round number, next resistance can be found at $221.67 based on a measured move. Support is at the 3 box reversal of $174.79 to $171.36 range. With a SMAX score of 7 out of 10, Loblaws is showing near term strength against all the asset classes.
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