This is the moment we've all been waiting for. Stocks finally pushing back up against their 200 DMA average. Some are even breaking above. More importantly for Canadians, the Canadian oil companies are pushing up against previous-high-resistance levels. The next few weeks will decide if this recent rally has finally marked the lows in the energy stocks and put the downtrends behind us.
An example would be CNRL. (CNQ.TO). This is really a major decision point for the investor. The Relative Strength in Purple has broken out to new 8-month highs. The SCTR has finally pushed well above 75. We can see price traded in a small range today as it continues to try and push through resistance.
With almost 40 million shares traded on the Canadian market (CNQ also trades on the US Market), there is some serious activity. After a run from $21 to $34, it has been crazy to see a large cap move 50% in 6 weeks.
Raging River Exploration has been one of the best-performing stocks on the $TSX. We can see an SCTR above 90 for February. Today, RRX.TO made an outside reversal and new one-week lows. This rally feels long in the tooth for this stock especially with the reversal at a previous level of resistance. The momentum (MACD) is reaching a high level as well, so that makes it more suspicious.
Tourmaline (TOU.TO) was one of the better performers in the previous bull market. It had a great day today on what could be a reversal day for Natural Gas. After testing the 75 level on the SCTR, TOU.TO pulled back and now looks ready to make another assault up to higher levels. The volume today was very steady and we closed near the highs of the day and a small breakout above the previous high. I really like the MACD bouncing off the centre line for the first time in a long time!
There are lots of the oil stories to cover. We set up our Oil and Gas chartlists last week on the Commodity Countdown webinar. This Commodities Countdown webinar had more viewers than any of the previous shows. It is an important one historically. Click here to see the archive. Commodity Countdown 20160303. We will be using these chartlists to talk about the oil markets on an ongoing basis. On Tuesday, March 8, I will be hosting a webinar on the Canadian Markets in the Canadian Technician Webinar 20160308. Some of the oil companies look ready to top out, others look ready to break out. It is going to be a great webinar with great opportunities to discuss Gold, Oil, Natural Gas, Manufacturing, Industrials. I look forward to seeing you there.
Good trading,
Greg Schnell, CMT
