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Gildan Activewear Inc. - (GIL.TO) - November 3, 2023

Boosted by a positive reaction to a better than feared earnings report, athletic clothing producer Gildan Activewear (GIL.TO) rallied 14.8%. This move helped GIL.TO to jump 13 spots in the SIA S&P/TSX 60 Index Report to 14th place.

With this move, Gildan returns to the Green Favored Zone for the first time since March of this year. Prior to March of 2022, GIL.TO had been a regular in the Green Favored Zone but since then, it has trouble cracking back into or staying for long in the top 25% of the rankings. We’ll soon see if the third time is the charm. Based on the size of the current candlestick, Gildan Activewear (GIL.TO) appears to be in the middle of its best week in at least three years. For the last 18 months, the shares have been stuck in neutral, trending sideways in a range between $36.50 and $45.00. Support at the bottom of the zone was successfully tested back in September, and the shares had been bouncing back. Gains have accelerated this week with the shares breaking out over $41.00 for the first time since June and snapping a downtrend line.

A close above $45.00 would signal the start of a new upleg with next potential resistance near the $50.00 round number, then the early 2022 peak near $52.50 and a measured $53.50. Initial support moves up to the $40.00 round number.

Since a spring 2022 selloff bottomed out in July of 2022, Gildan Activewear (GIL.TO) shares have been slowly grinding their way back upward. For the last six months, GIL.TO had been drifting sideways but remained supported above uptrend lines and previous support levels.

Yesterday, Gildan completed bullish Double Top and Spread Double Top breakouts, indicating renewed investor interest. Currently the shares are bumping up against their April peak near $44.95. A close above that level would signal the start of a new upleg. Should that occur next potential resistance may appear at previous column highs near $48.65 or $52.65, along with the $50.00 round number and $54.80 based on a horizontal count. Initial support appears near $40.70 based on a 3-box reversal, with a long-term 45-degree support line and several previous column lows near $37.60. With a bullish SMAX score of 6, GIL.TO is exhibiting strength against the asset classes.

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