Earlier this year, MEG Energy (MEG.TO) snapped out of a long-term downtrend with a breakout over $6.00, which has since established as support through multiple tests. A trading range has emerged between there and $8.00 initial resistance over the last three months. Within that range, the shares have been climbing, suggesting that accumulation has resumed, but a breakout over $8.00 remains needed to confirm that and signal the start of a new upleg within a larger upward trend.
Following last year’s stock market collapse, SNC Lavalin (SNC.TO) spent the rest of 2020 stuck in a sideways trading range between $17.50 and $26.50. Since the start of this year, the shares have come under renewed accumulation, shown most clearly last week with the shares launching upward off of their 50-day moving average and breaking out over $30.00 on an increase in volume.
For over a year, Canadian Tire* (CTC.A.TO) shares have been under steady accumulation, advancing in a step pattern of rallies followed by periods of consolidation at higher levels. Last fall, the shares broke out over $150.00, overcoming resistance that had been in place since 2018 and completed a bullish Ascending Triangle base, confirming the start of a new uptrend. The shares continue to attract new interest, this week breaking out over $200.00 on increased volume.
Changing sentiment and expectations can be clearly seen in this week’s changes in the SIA Charts Asset Class Rankings. Commodities has jumped up to 1st place, resource-sensitive CAD Equity is steady in 2nd place, while US and International Equity have dropped down in the rankings. In this issue of Equity Leaders Weekly, we look at recent broad-based strength in the Canadian Dollar and at the implications of a breakdown in the Russell 2000.
Tesla Motors (TSLA) shares have turned decisively downward this week. Cracks in the previous uptrend first started to appear back in February then the shares broke below their 50-day moving average, then in an April bounce, they peaked at a lower high. This week, the shares have snapped an uptrend line and then confirmed the start of a new downtrend by falling below the $600 round number and taking out several winter weekly closes to complete a bearish Descending Triangle pattern.
For over a year, ERO Copper (ERO.TO) has been under accumulation, steadily advancing in a rising channel of higher highs and higher lows. In the last two weeks, accumulation has accelerated with the shares breaking out over their 2019 peak to new all-time highs on increased volume and completing a bullish Ascending Triangle pattern to signal the start of a new advance.
Positive technical signals continue to mount in Enerplus (ERF.TO) shares. Back in the winter, Enerplus completed a bullish Ascending Triangle base pattern and then snapped a downtrend line. In recent weeks, the shares had been consolidating between $6.00 and $7.50. Yesterday, the shares broke out to the upside once again, signaling the start of a new upleg.
Uranium producer Cameco (CCO.TO) has started to climb once again within the Green Favored zone of the SIA S&P/TSX 60 Index Report. Last week, the shares staged a major breakout, rallying up off of successful tests of trend support and the 50-day average, breaking through $24.00 to a new multi-year high and signaling the start of a new upleg.
Accumulation in Arc shares has accelerated in recent weeks with the shares climbing on rising volumes, a sign of increasing investor interest. This week, the shares have broken out over $8.50 to their highest level since early 2019, confirming recent bullish Ascending Triangle breakouts over $7.00 and $8.00 and signaling the start of a new upleg in the current recovery trend.
The arrival of May has brought renewed interest in stocks and particularly commodities, with catchup/reopening plays and small caps attracting particular attention. In this issue of Equity Leaders Weekly, we look at recent strength in the prices of oil and rice, and what that means for markets.
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