Specialty chemicals producer Methanex (MX.TO) staged a big relative strength breakdown on Friday. It dropped out of the green zone of the SIA S&P/TSX Composite Index Report and fell deep into the Yellow Neutral Zone, sliding 35 positions to 93rd place.
Methanex (MX.TO) turned decisively downward on Friday. After rallying to start the year, Methanex had started to struggle in recent weeks, first with the $70.00 level, then with its 50-day moving average. Last week, MX.TO broke down below $60.00 on an increase in volume, a sign of accelerating distribution and the start of a new downswing.
Initial downside support appears in the $48.00-$50.00 area, followed by longer-term support closer to the $40.00 level. Initial resistance appears at the 50-day average near $65.00,
After peaking in April, Methanex (MX.TO) started to come under distribution, retreating in a Falling Channel of lower highs and lower lows. The selloff in Methanex accelerated last week with the shares completing a third Double Bottom pattern and breaking down below $60.00.
Next potential downside support appears near $48.75 based on previous column lows, then $46.85 based on a horizontal count, then more prior lows near $41.60 on trend. Initial resistance appears near $57.15 based on a 3-box reversal.
With a bearish SMAX score of 1, MX.TO is exhibiting weakness against the asset classes.
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