Imperial Oil Limited directionless

May 22nd, 2015 – 1 Comment

Over the last four days of trading IMO has moved out of an oversold situation as buyers took the stock to a test of resistance near $51.00.

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Today I will probe the charts of Imperial Oil Limited (IMO TSX) as I continue the long term assignment from Garry to examine some of the larger constituents of the major subindices of the TSX. IMO is an integrated energy company operating in Canada with Exxon Mobil Corp. (XOM NYSE) owning 69.6%. The company operates in three areas including upstream, downstream, and chemicals. The market capitalization of IMO is $35.07 billion and the dividend yield is 1.03%.

An inspection of the charts will identify the trend, support, and resistance associated with this stock.






The three-year chart for the S&P/TSX Capped Energy Index provides visual evidence of the challenges the index has been struggling with since June of 2014. Also worth noting is the resistance along the 50-day moving average that  the index needs to overcome if we can expect an extension of the advance that started in December of 2014.

As mentioned in the analysis of Husky Energy Inc. (HSE TSX) published on May 20, 2015 the index has been moving higher in an up channel since the beginning of 2015. The pattern within the channel has seen the stock oscillate twice between support and resistance providing trading opportunities. The MACD and the RSI generated buy and sell signals the index moved through the channel.

What should be on the radar for all investors in the energy space is the OPEC meeting scheduled for June. What the Saudi’s decide regarding production will be the next major driver for the sector.



The three-year chart depicts the advance that started in June of 2013 near $38.00 and came to an end at a 52-week high of $57.97 in August of 2014. The retreat that gripped the shares until January of 2015 provided a number of trading opportunities as the MACD and the RSI generated multiple buy and sell signals.

Since January of 2015 the IMO has been exhibiting volatile trading with big pops and big drops. The March move from $46.00 to $55.00 by mid April is the type of action that demands close surveillance in order to capture trading profits.







The six-month chart provides a close-up of the buy signals generated by the MACD and RSI in March as the shares touched $46.00. Also make note of the sell signals presented by the momentum indicators in April as the stock couldn’t over come resistance near $55.00. Over the last four days of trading IMO has moved out of an oversold situation as buyers took the stock to a test of resistance near $51.00.

With a dividend yield of 1.03% IMO is a stock that you buy in anticipation of capital gains. Over the course of the last year the only way to increase wealth was to actively trade the shares when the opportunities presented themselves.

Next time I will examine the charts for Crescent Point Energy Corp. (CPG TSX) to wrap up the look at the Energy Index for Garry.

Make it a profitable day and happy capitalism!




Categories: Energy
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