WEST FRASER TIMBER (WFG.TO) - September 7, 2022
Between the slowdown in the housing sector and the price of lumber trading at less than half of where it was six months ago, forest products stocks like West Fraser Timber (WFG.TO) have started to struggle. WFG.TO has been sliding down the rankings in the SIA S&P/TSX Composite Index Report since July. Yesterday it dropped out of the green zone into the Yellow Neutral Zone after falling another 17 positions to 65th place.
A long-term uptrend in West Fraser Timber (WFG.TO) appears to have peaked over the summer. Back in July, a breakout over $130.00 failed to hold above that level, a sign of exhaustion, and then in August, a rebound attempt faltered at a lower high near $125.00. In recent days the shares have started a new downswing, gapping lower, taking out their 50-day average and falling back under $110.00.
Initial downside support may appear near the $100.00 round number, followed by recent lows in the $90.00 to $94.00 area. Initial rebound resistance appears at the 50-day moving average near $114.75.
The uptrend which saw West Fraser Timber (WFG.TO) soar through 2020 and 2021 appears to have ended with the shared downshifting into a sideways trend primarily between $92.50 and $127.50 since the start of this year. A brief move up toward $132.00 appears to have been a buying climax as since then, a new downtrend of lower highs has emerged. Most recently, a downswing appears to have started with the shares breaking down below $115.00 and completing a bearish Double Bottom pattern.
Support tests within the current trading range include the $100.00 round number, previous column lows near $98.10 and $94.30, then $88.85 based on a horizontal count. Initial resistance on a bounce appears near $119.60 based on a 3-box reversal. With its SMAX score declining to a bearish 5, WFG.TO is exhibiting 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.