Today in our Daily Stock Report we are going to look at Embraer S.A. ADR. This is the first time we have highlighted ERJ in our daily commentaries.
The SIA Platform issued a Green Favored Zone signal in the SIA International ADR report back on November 8, 2023, at a price of $15.47. On April 11, 2025, the SIA Platform issued its Neutral Zone with Red SMAX signal which is the time for one to leave the name and look for better opportunities elsewhere. At the time of this signal, the shares had strengthened to a closing price of $41.31 which represents an 167% increase since its time in the favored zone. This exemplifies the logic of staying in investments in the green favored zone and reinforces SIA’s methodology of finding and staying with the winners which exhibit strong relative strength as many market participants are looking at the name.
Currently the shares reside in the #72 spot of the Neutral Zone of the SIA Intl ADR report, down 25 spots in the last week and 69 spots over the last month.
In looking at the candlestick chart we see the shares experienced a long sideways consolidation pattern from the spring of 2021 to February of 2024. Then the shares broke out of this pattern and a strong and steady uptrend materialized up until March of this year. A stiff downtrend has materialized here in the last month and the SIA Platform issued its signal to reevaluate the name at $41.61 as it may be time to look elsewhere for opportunities.
The basis of the SIA Platform is the Algorithm, which aims to identify an intermediate trend in play and guides you to participate in the “fat part of any uptrend” while helping you avoid the “fat part of any downtrend” while also adhering to a “rules based” investment discipline to remove the “guesswork” out of the equation. With a 167% price return from November 8, 2023, to April 11, 2025, when the shares were in the favored zone, this is a great example of the power of SIA and its Algorithm.
For those, looking for a support level, $35 seems like a reasonable point where the shares may find a floor while to the upside, the shares will need to reach its recent high at $52.00 before the sellers may re-assert themselves.
Let’s dive in and see what the Point and Figure Chart looks like today. Point and figure charting excels in trend identification by offering a clear view of price movements and trend reversals. In the attached chart, we see that the shares bottomed in October 2022, followed by a sizeable uptrend that broke above the long-term downtrend line in November of that year. This uptrend continued until April 2023, where the shares paused to consolidate their gains. Another strong rally began in November 2023, carrying the shares to a potential peak around the $55.00 area in March of this year. In the past month a strong column of 16 O’s appears triggering the SIA Signal to Neutral Zone with RED SMAX score indicating it is time to leave the name for better opportunities. Some support at this point can be found imminently at $40.74 but if that fails to hold, next support is at $34.77 and $32.12. To the upside, resistance is at $45.88 and above that, the 50% retracement level of $47.73. With a SMAX score of 5 out of 10, ERJ is not exhibiting much near term strength against the asset classes and is exhibiting a bearish double bottom pattern. Embraer SA based in Sao Paulo, Brazil, Embraer manufactures regional aircraft, business jets, and defense and security products. The company also offers a range of services to support its installed base of hardware. Its defense and security business is currently focused on developing the KC-390 military transport aircraft. The company also produces aircraft systems and structural components. It operates through the following segments; Commercial Aviation, Defense and Security, Executive Jets, and Service and Support. The company generates maximum revenue from Commercial Aviation segment.
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