Today I will go over the charts for Manulife Financial Corp. (MFC TSX) to conclude Andy’s request for a comparative analysis with Sun Life Financial Inc. (SLF TSX). This will be the fifth time since 2010 that I survey the particulars for MFC. The last was on October 1, 2012 when the shares were trading for $11.85. Barry had seen the value of his holding reduced by close to 66% and he wanted some feedback.
The research pointed to a downtrend that had been in place since 2010 and that the stock had been trading in a range with support at $10.00 and resistance at $14.00. A cup and handle formation was identified and it was advised that it could lead to a breakout if MFC could move up and through $12.50.
Retrospectively that was the right call. By the end of October 2012 a golden cross formed with the stock breaking above $12.50 by December. From there MFC started a new advance to its current trading level.
An updated analysis will identify the opportunities and risks associated with this investment and how it stacks up against SLF.
The three-year chart displays a sharp move higher from November of 2012 to January of 2014 where the shares traded close to $21.50. Since then trading in the shares have been more erratic. In January of 2015 the shares started a new leg up as the MACD and the RSI generated buy signals. The stock ran in a 52-week high of $24.20 in late June but has since pulled back.
The six-month chart exposes the sell signals generated by the MACD and the RSI in June. The selling that arose pushed the stock below the uptrend line it had been riding since January. At the moment we can see that the the shares need to hold support at $22.75 and move back above the 50-day moving average before we can anticipate a move forward.
MFC has been pulling back from the highs and until it resolves the downtrend and the direction of the the MACD and the RSI it would be prudent to keep your powder dry. In a comparison with SLF – from a technical perspective – SLF looks like the pick of the litter.
Next time I will review the charts for Cineplex Inc. (CGX TSX) for Tia
Make it a profitable day and happy capitalism!