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MDA Space (MDA.TO) - May 17, 2024

SIA Charts’ relative strength rankings help investors manage risk by identifying stocks and sectors which are underperforming or starting to underperform relative to their peers and/or their benchmarks indicating that capital is moving elsewhere.

MDA Space (MDA.TO) joined the SIA S&P/TSX Composite Report back in March in the top 10 of the green zone. Since then, it has been steadily drifting downward. Relative strength losses have accelerated in the last 10 days and yesterday, MDA.TO fell out of the green zone for the first time and into the Yellow Neutral Zone.

Yesterday, MDA.TO finished in 75th place, down 20 spots on the day and 56 places in the last month. Over the last month, the shares have lost 7.0%, compared with a gain of 3.0% for the S&P/TSX Composite Index over the same period.

Candlestick Chart Tests Uptrend Support. This MDA Space (MDA.TO) chart provides a textbook example of how certain levels can reverse polarity from resistance to support and back. In late 2021, MDA Space broke down below $15.00 signaling the start of a downtrend where the shares lost over half of their value.

A recovery trend which started in January of 2023 eventually clawed back those losses, but it was then contained by $15.00 resistance as three attempts by bulls to push through that key round number failed. In the last two weeks, the shares have started to fall away from $15.00 and are currently testing an uptrend support line.

A close below $12.75 would signal that the uptrend has failed and a new downtrend has started. Should that occur, next potential support may appear at a previous low near $10.75, then the $10.00 round number. Initial resistance on a bounce appears at the 10-week moving average near $14.30.

A year-long uptrend in MDA Space (MDA.TO) appears to have ended for now. Last month, MDA.TO broke out by one row then rolled over and turned downward, a classic Bull Trap peak. Since then, the shares have come under distribution with a bearish Double Bottom breakdown signaling the start of a new downswing.

Potential downside support tests include $11.90, a previous breakout point, $10.60. where a prior low and a horizontal count converge, and the $10.00 round number. Initial resistance on a bounce appears near $14.00 based on a 3-box reversal and a retest of a recent breakdown point.

With its bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 5 out of 10, MDA.TO is exhibiting short-term strength weakness against the asset classes.

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