Continuing with the assignment from Paul today we will inspect the particulars associated with Suncor Energy Inc (SU TSX). This will be the fifth time since 2009 that investors have sought a second opinion regarding SU. The last time was on January 20, 2012 when the shares were trading for $33.56.
Darryl was intrigued by the price of the stock relative to the 52-week high which at the time was $47.50. He was looking for any thoughts that I might have on the shares. The research indicated that SU was meeting resistance along the 200-day moving average on a bounce off of $27.50. In addition the RSI signalled that the stock was overbought and the MACD was flattening out. It was also noted that energy shares were entering a period of seasonal strength which might lead to a move through resistance.
The stock did move through resistance and touched $36. 97 by February 20, 2012 but after that investors had to deal with a decline to $27.47 by May. In an earlier examination of SU it was identified that it was not a buy and hold stock and that was once again confirmed
Another run at the charts will provide the information needed to decide which of the three stocks Paul is considering would prove to be the pick of the litter.
The three-year chart exhibits many similarities to the three year chart for Husky Energy Inc.(HSE TSX) that we examined on February 6 as part of this assignment. There’s the 52-week high in June of 2014 followed by a steady decline to a 52-week low in December of the same year. The charts also exhibit similar buy signals generated by the RSI and the MACD in December as SU bounced off the lows. Worthy of note is the resistance that has formed near $40.00 and the 200-day moving average.
The six-month chart depicts the bounce off the lows in December and the resistance along the 200-day moving average. The next flex point will be the release of Q1 results in April. The company has responded to the challenges brought on by the decline of oil prices by reducing spending and adjusting its staffing levels.
On Wednesday February 11 we will conclude the comparative analysis with an inspection of Gibson Energy Inc. (GEI TSX) to help Paul decide which of the three best meet his needs.
Make it a profitable day and happy capitalism!