TSX:BMO - Post Discussion
Post by
TimeBuilder on Aug 26, 2022 11:16am
National Bank comments >>>
10:14 AM EDT, 08/25/2022 (MT Newswires) -- National Bank of Canada overnight Wednesday said the strong relative performance days for the banks ended at the beginning of the year as the chart of BMO Equal Weight Banks Index ETF (ZEB.TO) and S&P/TSX Composite Index peaked.
A period of much weaker relative performance lies ahead as this ratio chart carves out a head and shoulders top that is poised to break down, National Bank said. Completing this formation along with top structures in the bank charts suggests being materially underweight the banks, it added.
National Bank said a failing rally on the Bank of Montreal (BMO.TO) chart indicates a renewal of its downtrend that began when it broke a top at $130.00. Recent weakness has broken the top again as the stock fell below $130.00.
A neutral relative performance profile will turn more negative as the declining trend picks up momentum, National Bank said. Its price target for BMO is $110.00.
National Bank noted that Canadian Imperial Bank of Commerce (CM.TO) completed a one-year top when it broke $68.00 in May. Big volume on the break reflects strong selling interest as the bears take control, it said.
National Bank noted that a weak volume rebound is being quickly turned back at resistance. Its price target for CIBC is in the mid-$50s.
On Toronto-Dominion Bank (TD.TO), National Bank said it is arguably one of the weakest major bank charts as the stock had a modest rebound from its recent lows. A failing rally is coming back to test support at $82.00, it said.
The top breakdown at $90.00 on increasing downside volume points to a target of $70.00, National Bank said. It added that a bigger top is forming, which indicates a break of $82.00 could potentially lead to a target that exceeds $70.00.
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