It has been a short, sideways week for equity markets. Stocks fell heading into the holiday weekend and have bounced back a bit to start a new week, but not enough to offset their previous declines, leaving markets essentially in a holding pattern for the moment. In this issue of Equity Leaders Weekly, we consider the wider implications of recent weakness in Taiwan shares and at a breakout in the oilfield service sector.
In this issue of Equity Leaders Weekly, we take our monthly look at sector scopes and at what recent declines in Asia Pacific indices, particularly Japan, may be telling us about sentiment and risk tolerance toward international equities.
A classic bullish Flag pattern appears to be underway in lululemon (LULU) shares. After bottoming out near $275 last month, earlier this month, the shares broke out over $325 and blasted through their 50-day moving average on a big spike in volume, kicking off a rally (the first pole) that carried the shares up toward $375. The shares then paused for a couple of weeks near $375 (the flag part).
Back in March of 2020, a long-term downtrend in Kraft Heinz (KHC) shares bottomed out and was snapped in the summer of 2020. Since then, the shares have remained under accumulation and have been forming a large bullish ascending triangle base of higher lows below $43.50 resistance where a breakout would confirm the start of a new uptrend.
Back in February, a downtrend in Sandstorm Gold (SSL.TO) shares was contained by multiple tests of support near $7.00, and since then the shares have been under renewed accumulation. Earlier this year, the shares broke through $9.00, snapping a downtrend line and rallied up toward $10.00. Following a brief pause for a rest, SSL.TO has launched into a new upleg. Yesterday, it broke out of a base clearing $11.00 to trade at its highest level since October of 2020.
A major breakout is underway in Alimentation Couche-Tard (ATD.B) shares. Back in July of 2021, the shares completed a bullish Ascending Triangle pattern with a breakout over $45.00, a level that reversed polarity and became support while the shares moved into a higher range between there and $53.00. Last month, the shares successfully retested channel and long-term uptrend support and haven’t looked back since, soaring to new all-time highs above $55.00 and signalling the start of a new upleg by blasting through $53.00 which may reverse polarity to become initial support.
Technical conditions for Union Pacific (UNP) have weakened dramatically over the last week. Since peaking near $275 a few days ago, UNP shares have been rapidly losing ground on a spike in volumes, a sign of increased selling pressure. The shares have broken down below their 50-day moving average and snapped an upward line with a downward breakaway gap that also took the shares back under $250.
Equity market confidence has eroded over the last few days. While the threat that more sanctions could be levied on Russia over the Ukraine war has impacted European market action, here in North America, the focus of investors has turned back to the growing headwind of tightening monetary policy. In this week’s issue of Equity Leaders Weekly, we look at the implications of a major trend change in the US 30-year treasury yield, particularly for the homebuilding sector.
Internet advertising agency AcuityADS Holdings (AT.TO) spent nearly all of the last year in the doldrums, stuck deep in the red zone of the SIA S&P/TSX Composite Index Report. In the last couple of weeks, it has caught fire and rocketed up toward the top of the Yellow Neutral Zone. Yesterday it finished in 62nd place, 2 spots outside of the green zone after jumping 13 places on the day and 158 positions in the last month.
Energy producer Peyto Exploration (PEY.TO) returned to the Green Favored Zone of the SIA S&P/TSX Composite Index Report in January and has continued to climb up the relative strength rankings. On Friday, it finished in 5th place, up 9 positions on the day and up 20 spots in the last month.