Today I will inspect the charts for Crescent Point Energy Corp. (CPG TSX) as a continuation of the long term assignment from Garry. This will be the fifth time since 2010 that I examine the potential for the stock. The last time was on March 4, 2013 when the shares were trading for $38.55. Knud had bought at $45.00 and wanted a second opinion.
The research conducted at the time indicated that the shares were trading in a range bound pattern with support at $36.00 and resistance at $43.00. It was also noted that the MACD and the RSI were neutral at best and that the stock was testing support along the 50-day moving average. It was advised that despite the 7.219% dividend yield CPG was not a buy and hold stock. It was suggested that investors consider trading for profits and look for attractive entry and exit points.
The stock is currently offering a 9.11% dividend yield. An increase in the yield is only possible if the there is a drop in the price of the stock or an increase in the dividend. An investigation of the charts will quickly determine the cause.
The three-year chart illustrates the retreat that started in June of 2014 as sellers took control of the market. The decline continued to the 52-week low of $21.20 by December of last year where the stock got oversold. The MACD and the RSI signalled a trade to the upside was shaping up attracting buyers to the potential. The shares ran to just above $32.00 by early February but efforts to move through the $32.00 range have met with resistance.
It is worth mentioning that the momentum indicators have provided a number of buy and sell signals as CPG has attempted to extend the move higher.
The six-month chart highlights the oversold situation in mid December of 2014 and the buy signal generated by the MACD and the RSI. Make note of the resistance near $32.00 and the struggle to remain above the 50-day moving average. With no clear indication of direction and the June 05, 2015 OPEC meeting on the near term horizon it would be prudent to embrace patience as a virtue.
Next time I will address the charts of Supermex Inc. (SXP TSX) for Andrew.
Make it a profitable day and happy capitalism!