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Celestica Inc. - (CLS.TO) - August 22, 2023

Today, we are going to look at Celestica Inc (CLS.TO) which we last commented on in the May 30th edition of the Daily Stock Report when it just entered the Favored Zone a few days prior in the SIA S&P/TSX Composite Index Report at a price of $17.50. Now the shares are at $28.05 representing a 60.2% increase in just under 3 months time. This is a perfect example of why it is important to look for names in the favored zone. The shares currently occupy the #1 spot in the S&P/TSX Composite Index, up 2 spots in the last month and 152 spots in the last quarter.

Celestica Inc is a leader in design, manufacturing, hardware platform and supply chain solutions for the world’s most innovative companies. In looking at the attached Candlestick chart of Celestica Inc, we see that the shares broke out to higher highs back in June when the price moved above $19.00. On July 26th, the company reported its 2nd quarter results which the market reacted favourably to as CLS.TO delivered a strong quarter, exceeding the high end of their guidance ranges on revenue and non-IFRS adjusted EPS. As a result of this earnings release, the shares gapped up and a new rising trend has emerged which continues up to today. Most recently, we see the shares reached a new high not seen since 2004 at the $29.00 area. Support can be found at the 50-day moving average of $22.85 level which coincides to the area where the shares gapped up.

In the attached Point and Figure Chart at a 2% Scale, we see the share’s extremely strong rally starting in June of this year which had culminated in a column of X’s lasting 35 rows with the shares exhibiting a bullish Double Top Pattern. Support can be found at its 3-box reversal of $26.62. If it can’t hold support here, the next level of support can be found at the 50% retracement level of $22.72. Potential resistance can be found here currently at the $29.39 area which was its 2004 high. It is manages to break above this critical long term resistance level, next area of resistance can be found at approximately the $35.00 area. With an SMAX Score of 10, CLS.TO is exhibiting near term strength against all the asset classes.

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