This stock may be headed for a breakout to the downside.
The stock chart for Loblaw Companies Ltd. (L-T) is one investors may want to take note of with the share price potentially exhibiting a bearish technical signal in the future – a "death cross."
A "death cross" is a potentially bearish signal for a stock that occurs when a shorter-term moving average, like the 50-day moving average, crosses below a longer-term moving average, such as the 200-day moving average. When this occurs, it marks a potential negative signal confirming the downtrend in the price action may have traction.
With respect to the shares of Loblaw, the 50-day moving average is at $70.28, which is still above, but approaching, the 200-day moving average, which sits at $69.28.
The next support level is around $62. Failing that, there is support at $60, which is approximately 9 per cent below the current share price.
The relative strength index is at 25, suggesting the shares are in oversold territory. Generally, a reading of 30 or below indicates an oversold condition.
From a fundamental perspective, analysts see significant upside potential for this stock.
Since the beginning of the year, there have been 15 analyst reports issued, 10 are 'buy' recommendations and five are 'hold' recommendations. The average one-year target price is $79.69, implying a potential return of over 20-per-cent. Target prices range from a low of $76 to a high of $84.
The opposite scenario is a bullish technical signal called a "golden cross." A "golden cross" occurs when a short-term moving average, such as the 50-day moving average, crosses above a longer-term moving average, such as the 200-day moving average. When this occurs, it marks a potentially positive signal suggesting the upward price momentum may have traction.
Many traders suggest waiting until the 50-day moving average crosses above the 200-day moving average by a certain percentage, such as 3 per cent, to confirm the bullish signal.
Listed below are securities with recent Golden and Death Crosses, as well as potential future Golden and Death Crosses.
This report is based on technical analysis. Technical analysis does not replace fundamental analysis, but can help identify companies worth having a closer look at.
Golden Crosses | 50-day moving avg. | 200-day moving avg. | |
---|---|---|---|
AGT-T | AGT Food & Ingredients Inc. | $36.67 | $36.47 |
ATA-T | ATS Automation Tooling Systems Inc. | $10.65 | $10.39 |
MG-T | Magna International Inc. | $53.31 | $51.70 |
EFN-T | Element Fleet Management Corp. | $11.63 | $11.62 |
Potential Future Golden Cross | |||
EXE-T | Extendicare Inc. | $8.77 | $8.81 |
MFC-T | Manulife Financial Corp. | $17.95 | $18.24 |
MX-T | Methanex Corp. | $40.30 | $40.47 |
RKN-T | Redknee Solutions Inc. | $2.07 | $2.08 |
Death Crosses | |||
NWC-T | North West Company Inc. | $28.17 | $29.15 |
Potential Future Death Crosses | |||
AX.UN-T | Artis REIT | $12.78 | $12.77 |
CAR.UN-T | Canadian Apartment Properties REIT | $30.31 | $30.08 |
CUF.UN-T | Cominar REIT | $16.24 | $16.35 |
DIR.UN-T | Dream Industrial REIT | $8.13 | $8.02 |
GMP-T | GMP Capital Inc. | $4.91 | $4.81 |
G-T | Goldcorp Inc. | $21.71 | $21.40 |
L-T | Loblaw Companies Ltd. | $70.14 | $69.29 |
OR-T | Osisko Gold Royalties Ltd. | $15.51 | $15.27 |
REI.UN-T | RioCan Real Estate Investment Trust | $27.58 | $26.96 |
SEA-T | Seabridge Gold Inc. | $15.37 | $15.10 |
TZZ-T | Trez Capital Mortgage Investment Corp. | $8.28 | $8.14 |