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Wheaton Precious Metals Corp (WPM.TO) - January 23, 2024


Although the price of gold has remained well supported above $2,000/oz lately, gold stocks have started to slide back down the rankings in the SIA S&P/TSX 60 Index Report in recent weeks, which suggests that investors may be thinking gold’s rally could be done for now and are moving on to other plays.

Wheaton Precious Metals Corp (WPM.TO) for example, had entered the green zone back in November when gold was rallying but recently, it has dropped back down into the Yellow Neutral Zone. Currently in 20th place, WPM.TO has fallen 12 positions in the last month. The share price has declined 6.0% in the last month, compared with a gain of 0.25% for the S&P/TSX Composite Index.

Candlestick Chart Shows an Emerging Sideways Trend:

It has become increasingly clear over the last eight months that since peaking back in April, Wheaton Precious Metals (WPM.TO) shares have downshifted from an uptrend to a sideways range between $53.00 and $68.00. Last month, an upswing ran out of gas at a lower high and this month, a new downswing has started with a breakdown below $63.00.

Downside support tests may appear near $58.00, then an uptrend line near $56.00, the October low near $53.00 and the $50.00 round number. The $63.00 breakdown point reverses polarity to become initial resistance.

Point and Figure Chart Rolls Down from a Lower High:

This 1% chart highlights the recent downturn in Wheaton Precious Metals (WPM.TO) shares. A late 2023 rally ran out of gas in December just short of $67.25 where the shares faltered short of their May 2023 peak. After failing twice to break through, it appears that bulls have given up and bears have gained the upper hand with the shares completing a bearish Double Bottom breakdown and continuing to decline.

Initial downside support appears at previous highs/lows near $57.95, followed by $55.65 based on a horizontal count and then the October 2023 low near $52.95. Initial resistance on a bounce appears near $64.65 based on a 3-box reversal.

With its bullish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) falling to 7 out of 10, WPM.TO is still exhibiting short-term strength against the asset classes for now, but investors should note that its SMAX score has come down from a high of 9 out of 10 back in December.

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