We first recommended Tim Hortons on July 24, 2010, at $35.60. The stock reached a high of $57.91 in May of this year for a 63-per-cent appreciation at that time. Recently, numerous negative technical signals appeared: price declined below the rising trend-line (dashed line) and below the 40-week moving average (40wMA); there are lower highs (arrow); and the MACD (moving average convergence divergence) is falling (lower panel). There is some support at $44-$45 (shaded area) and a rally may occur towards $49-$50, but there are considerably lower targets visible. Only a rise above $52-$53 would reverse the negative trend.
Monica Rizk is the senior technical analyst for Phases & Cycles Inc. (www.phases-cycles.com). Ron Meisels is a contributor to the www.NA-marketletter.com website and Tweets at @Ronsbriefs. They may hold shares in companies profiled. Please see the site for a glossary.