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Canadian Imperial Bank of Commerce (CM.TO) - January 4, 2024


At SIA Charts, 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.

Over the last two months, increased speculation among investors that central banks are either done or close to done raising interest rates for this cycle has sparked a rebound in Financials. Recent movement in the SIA S&P/TSX Composite Index Report indicates that Canadian banks are also gaining in relative strength.

In the January 3rd edition of the Daily Stock Report, we featured regional bank Canadian Western Bank. The Big Six have been moving up the rankings in the SIA S&P/TSX Composite Index Report lately as well, particularly CIBC (CM.TO). CIBC tumbled down the rankings in 2022 and spent nearly all of 2023 stuck in the Red Zone. During its time in the Red Zone, the shares fell slightly but missed out on a 10.5% gain by the Canadian benchmark index over that same time period.

In the last month, CIBC has attracted renewed interest, and its relative strength has improved significantly. The shares have snaped out of a relative strength downtrend, exited the red zone and returned to the Green Favored Zone for the first time since April of 2022. Yesterday, CM.TO finished in 52nd place, up 86 positions in the last month.

Candlestick Chart Breaks Out of a Downtrend:

A long-term downtrend in CIBC shares, which started in the spring of 2022 appears to have finally come to an end. Over a three-week period in late October, the shares formed a bullish Morning Star (circled) candlestick pattern, a sign the shares were bottoming out and that dominance was shifting from bears to bulls. In November, the shares snapped out of their downtrend, and completed a bullish Falling Wedge pattern, signaling that an upswing was getting underway. Since then, the shares have continued to climb, rallying up above $60.00.

This quick move up from $47.50 toward $62.50 followed by a pause this week may be a flag pattern forming. If so, a measured move suggests the shares could test $77.50 over time but along the way, resistance tests may emerge at previous highs near $67.50 and $72.50. Initial support may emerge at the $60.00 round number, then $57.00, a recent breakout point.

Point and Figure Chart Indicates a Rebound Underway:

CIBC (CM.TO) shares have shaken off a year and a half of steady distribution that saw them steadily decline in a Falling Channel of lower highs and lower lows. In the last six weeks, the shares have come under renewed accumulation, rallying from near $47.50 toward $62.50 without even a three-box correction along the way. In building the current bullish High Pole advance, the shares have snapped out of their previous downtrend and completed bullish Double Top and Spread Double Top breakouts.

A horizontal count suggests initial resistance may appear near $68.35, followed by the 2022 peak near $76.45, and then $81.65 which is also based on a horizontal count. Initial support appears near $58.30 based on a three-box reversal.

With a bullish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 9 out of 10, CM.TO is exhibiting short-term strength against the asset classes.

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