Scotiabank stock holds C$128.58 support: Key levels to watch

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Scotiabank slips 0.12% to C$128.69

Highlights

Scotiabank amended its share repurchase plan to allow buybacks of up to 40 million common shares after regulatory approval.
The bank issued a new US$10 billion structured products base prospectus and expanded its offering for Ultra-High-Net-Worth clients with Scotia Global Intelligence.
Shares of Scotiabank trade below short- and medium-term moving averages with technical indicators signaling seller dominance and a high probability of downward movement toward C$126.79.

Share buyback expansion and new funding sources as capital strategy shifts

Scotiabank amended its normal course issuer bid to permit the repurchase of up to 40 million common shares, following approvals from the Toronto Stock Exchange and the Office of the Superintendent of Financial Institutions. This action directly reduces the outstanding share count and represents a concrete capital allocation move to support shareholder value. Additionally, the bank published a new base prospectus for its US$10 billion structured products program, as reported by Tipranks, expanding potential funding avenues, while Scotia Wealth Management launched Scotia Global Intelligence to broaden its service range for Ultra-High-Net-Worth clients, according to Financialpost.

Oversold signals intensify as BNS struggles below short-term averages

On the H1 chart, BNS is positioned below the MA-20 at C$129.21 and the MA-50 at C$130.16, while remaining above the MA-200 at C$111.81 on the daily timeframe. Key support is defined by the Ichimoku Kijun at C$128.58. Momentum indicators remain weak: MACD is signaling Sell, ADX is neutral, and RSI stands at 35.38, suggesting oversold conditions. Stochastic RSI, CCI, and Bull/Bear Power confirm a seller-dominated environment, while the Awesome Oscillator remains neutral, not providing trend confirmation.

Downside risk prevails as price range holds with negative sentiment

Looking ahead over the next several days, BNS is expected to trade sideways within the range of C$126.79 to C$130.59 based on current volatility. The probability of a move higher remains very low, while a move lower is more likely unless persistent negative sentiment eases. A break above C$130.59 could trigger renewed upside towards or beyond resistance, while any breach of immediate support may push prices below C$126.79.

Anton Kharitonov, analyst at Traders Union, sees Scotiabank’s share buyback amendment as a firm capital allocation move but notes that technical signals remain weak. He believes momentum indicators point to continued seller dominance and that sentiment is not improving. Price remains capped below key moving averages, with a downside bias unless resistance at C$130.59 is reclaimed. "Until BNS consolidates above C$130.59 with improving momentum, I remain defensive and see limited upside."

Earlier, analysts noted that Scotiabank shares were expected to trade without strong directional momentum, remaining constrained within established support and resistance. The latest developments, including expanded buyback authorization and new capital programs, add potential catalysts to the near-term outlook, but the primary risk remains a downside move if support is breached during the current period of weak momentum.

Source of Data: BNS Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.