XFN: Bottomed out, Target=48/49.5XFN is rising toward toward 48 and 49.5 mark. As long as the share's price trade above 45, the ongoing bullish bias is expected to continue.
Support=45
Resistances=48 and 49.5
XFN trade ideas
Attractive long-term investment if XFN trades below 40.9Attractive long-term investment if XFN stock price trades below 40.9
XFN which tracks the S&P/TSX Capped Financials Index mostly represents the performance of five big banks. The average yearly return between 2002 and 2021 is about 8.1% which implies poor performance given the high volatility of ETF’s past returns. The fact that XFN long-term secular rising trend has experienced three major falls in price over 20-year period suggests that the best time to invest in the ETF is when price has fallen more than 30% from its high.
Given the top pattern and having traded below 200-day moving average, XFN stock price is likely to face more downward pressure within the next 6 months. If price falls between 32.9 and 40.9 it would make an attractive buying opportunity given the base case scenario price target of 45.1.
The worst-case scenario is to see XFN stock price trades below 32.9 and above 22 by the end of 2023 which is a decline between 28 to 50% from current level.
The key levels to watch are 43.15, 40.9 and 39.6 where a possible rebound around these levels are expected.
XFN bottomed out, heading toward 50XFN bottomed out on Jul 14 and since then has been bullish. It has demonstrated a strong momentum. Looking closely at key metrics it shows that the low of 42.43 would not breach for the balance of the year. Based on its current pattern, there is still more room to run. However it is hard for the stock to get through the area between 48.8 and 50 during the third quarter.
The most probable scenario is to see the stock trade above 45/47 zone and below 52/54 by the end of this year.
Canadian financial XFN to get shatteredTechnically, it is more probable that the upper resistance ceiling be broken for a bullish run, but I feel we will have another pullback to the lower trend line because of end of cycle, banks stage 1 reserves under funding might hit earnings pretty soon as the bank rebalance their reserves to cushion real estate defaults. A catalyst could be Canadian authority crack down on money laundering into REITs from abroad.
