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Canadian Western Bank (CWB.TO) - January 3, 2024


At SIACharts, we compare head-to-head battles of thousands of stocks, commodities, mutual funds and exchange traded funds daily and rank them by who is winning the most in their respective universes. The top 25% are considered the Green Favored Zone, 26-50% make up the Yellow Neutral Zone and the bottom half of each league table is considered the Red Unfavored Zone.

For the last two months, growing speculation among investors that central banks are either done or close to done raising interest rates for this cycle has sparked a rebound in interest rate sensitive groups, including Utilities, Real Estate, and Financials. In the US, national and regional banks have been on the rebound for some time and recent movement in the SIA S&P/TSX Composite Index Report indicates that Canadian banks are also gaining in relative strength.

Canadian Western Bank (CWB.TO) currently holds the highest spot in the SIACharts rankings for Canadian banks. CWB.TO spent eighteen months stuck in the red zone between March of 2022 and September of 2023. Since the summer, it has been steadily climbing back up the relative strength rankings and last month, it returned to the Green Favored Zone for the first time since June of 2021. Currently, CWB.TO is sitting in 36th place, up 15 positions in the last month.

Candlestick Chart Continues to Climb:

Canadian Western Bank (CWB.TO) shares spent a year building a base for recovery from their 2022 selloff. That process was successfully completed in September when a big rally snapped a downtrend line and cleared $27.00 to complete a bullish Ascending Triangle base, signaling the start of a new uptrend. Since then, accumulation has accelerated as shown by the rising slope of the more recent trend support line, and the shares have continued to advance in a bullish Step Pattern of rallies followed by pauses at consistently higher levels.

A measured move from the base suggests next potential resistance may emerge near $34.00, followed by a potential retest of the 2021 peak in the $37.00 to $37.50 area. Initial support appears near $29.00, the most recent breakout point.

Point and Figure Chart Catapults Upward:

A big selloff in Canadian Western Bank (CWB.TO) shares bottomed out in October of 2022 and since then, the regional bank’s shares have been under renewed accumulation. Over the last five quarters, a new recovery trend of higher lows has emerged, and the previous downtrend has been snapped. The shares have completed a series of bullish Double Top breakouts, the last two of which, with only a 3-box correction between then, have combined into a Bullish Catapult, which remains active.

Horizontal counts suggest next potential resistance on trend may appear near $35.10, then near $37.95 which is also close to a retest of the shares’ late 2021 peak. Initial support appears near $27.10 based on a 3-box reversal.

With a perfect bullish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 10 out of 10, CWB.TO is exhibiting short-term strength across its asset class.

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.

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