Intact Financial Corporation (TSX: IFC) long term technical outlook and stock analysis February 2020

Monthly chart

Intact Financial Corporation (IFC) monthly chart shows that over the long term, its share price has been on a continuous uptrend, moving within the above ascending channel. It broke out of the channel in 2019 to trend upwards in a stronger move.

As prices have been forming successive highs, no strong resistance can be derived from the monthly chart yet.

The upper line of the channel may be taken as the immediate support followed by the C$110 area and then the lower border of the channel.

Weekly chart

This weekly chart illustrates the steep upwards move of IFC share price. Aggressive traders may consider entry on any pullback from the uptrend. With the upwards momentum being as strong as it is, pullbacks may be shallow.

A failure of this upwards trend though may see prices seeking a lower support, the most obvious and thus likely strongest of which is around the C$108/110 area. Of course, it may just as well form a new support area higher up.

After a period of sideways movement, IFC stock price began to trend upwards with greater momentum which can be seen in the increasing divergence between the 50 period moving average (MA50) and the 200 period moving average (MA200) that began around early 2019.

Prices moved up by about C$16 from C$96 to C$112 and consolidated briefly before making a similar move towards C$128 before consolidating into a flag pattern again (purple lines and arrows).

After breaking out of the second flag pattern, prices moved half the previous distance, up C$8 to the C$136 area before consolidating. Prices than mirrored this move, moving up C$10 to C$146 before consolidating.

A potential target price (TP) should this consolidation pattern (possibly an ascending triangle) be broken out of, would be around C$155.

Should prices fall though, previous areas of resistance-turned-support (the consolidation patterns) may serve as areas of support.

Daily chart

The daily chart shows the formation of an ascending triangle pattern on the back of an upwards move. This pattern, which is usually a bullish continuation pattern is also supported by the MA50. A potential TP should this pattern be fulfilled is around C$158.

As of market open on 5th February 2020, prices have jumped to C$155.

Conclusion

TRX : IFC share price is currently in a strong uptrend. Periods of retracement and sideways consolidation may be considered for entry.

Traders should keep in mind though that as prices move higher, the risk of a bigger retracement and even trend reversal grow higher and should include this factor into their trading plan.

Should the upward move stall, prices may seek previous support levels, the first of which – as of 5th of February 2020 – is around C$146 followed by the lower areas of significance.

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