Crescent Point Energy Corp. is not a buy and hold stock

Mar 4th, 2013 – Comment

The current yield on the stock is 7.219% which may have been what influenced your decision to buy at $45.00 but as advised in the November 2012 analysis you have to approach CPG with caution.


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Hello,

Bought Crescent Point Energy @ 45.00 ever since then it has been up and down mostly down, do you have an opinion on where this stock is going?

Thanks,

Knud

 

Hey Knud,

Thanks for the assignment. This will be the fourth time that I investigate the possibilities that surround Crescent Point Energy Corp. (CPG TSX) since 2010. The last analysis was conducted on November 14, 2012 on a request from Adam. The stock was trading for $38.32 and it was advised that a downtrend was in place and that investors should proceed with caution. It was also noted that the stock offered a dividend yield of 7.2% and offered opportunities to trade for profit within a range. CPG had been range bound with support at $37.00 and resistance at $44.00.

Another examination of the charts will assist in answering your question as to where the shares are going.

 

 

The three-year chart provides a new prospective on the trading range with a lower floor at $36.00 and a lower ceiling at $43.00. The shares formed a double bottom at $36.00 with one leg down in early December of 2012 and the second forming in early January of 2013. A double bottom is a reversal pattern which signals the end of selling pressure and the control of the market shifting into the hands of buyers. However the advance was short lived as the shares hit resistance at $40.00 and began another retreat. Currently the stock is now testing support along the 50-day moving average.

 

 

 

 

 

 

 

The six-month chart indicates that there is a downtrend in place that started in late January and continues to be the noticeable trend. In addition the MACD and RSI are neutral at best. The current yield on the stock is 7.219% which may have been what influenced your decision to buy at $45.00 but as advised in the November 2012 analysis you have to approach CPG with caution. It offers an attractive dividend and trading opportunities but it is not a buy and hold stock.

 

Make it a profitable day and happy capitalism!

 

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