Crescent Point Energy Corp. offers a healthy dividend and opportunities to trade for profits

Nov 14th, 2012 – 2 Comments

At this point however I would approach CPG with caution given that the downtrend line is very much in place and the gap down in late October suggests that more work needs to be done before putting capital at risk.


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Hi Lou,

What is your analysis of Crescent Point Energy?

Thank you!

Adam

Hey Adam,

Thanks for the assignment. This will be the third time that I review the opportunities and risks presented by Crescent Point Energy Corp. (CPG TSX). I last ran the charts exactly one year ago on an assignment from Joe. At the time the shares were trading for $41.66 and it was observed that they were moving in a gentle down channel with resistance at $44.00 and support at $37.00. It was advised that with the MACD turning lower that the shares would give up some ground and provide a better entry point. The stock did pullback 2.08% to $40.79 after which it began a move higher to $45.00.

CPG has been very active on the acquisition trail with $1.7 billion in takeovers in 2012. They have been issuing stock to finance the deals which has some money managers concerned but when you look at the fact that they extended their reserve life index to 16.2 years from 14.3 years with additional reserve growth potential the benefits seem to exceed the cost.

An examination of the charts will provide greater depth to the intelligence regarding CPG.

 

The three-year chart provides evidence of the range bound pattern identified a year ago. Resistance at $44.00 and support at $37.00 with some spikes through both that have met with either selling or buying. Currently the shares are testing support $38.00 as they have fallen below the 50 and 200-day moving averages. The MACD and RSI both generated a sell signal in September of 2012 when the shares jumped to $45.00 but could not move higher as traders took their profits.

 

 

 

 

 

The six -month chart illustrates the selling that came into the stock in September and provides a close-up of the sell signals provided by the MACD and RSI. Currently the indicators appear to be turning higher. At this point however I would approach CPG with caution given that the downtrend line is very much in place and the gap down in late October suggests that more work needs to be done before putting capital at risk.

CPG offers a dividend that yields 7.2% which is enticing plus it offers healthy opportunities to trade the shares for profit. Look to catch a ride on an established uptrend and enjoy the gaines and the yield.

 

Make it a profitable day and happy capitalism!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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