Suncor Energy Inc. needs oil price strength to prosper

Jun 5th, 2015 – Comment

SU offers a dividend yield of 3.11% which has to be weighed against the volatile trading pattern that has been in place since June of 2014 when oil prices retreated from the highs.


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Hi Lou,

Having just read your article on CPG I’d be interested in what your thoughts are for Suncor?

Regards,
Vito

 

Hey Vito,

Thanks for the assignment. This will be the sixth time since 2009 that I examine the charts for Suncor Energy Inc. (SU TSX). The last time was on February 9, 2015 for Paul. The shares were trading for $38.74 and the research indicated that the shares were meeting resistance near $40.00 and along the 200-day moving average.

A probe of the charts will update my thoughts on SU.

SU

The three- year chart depicts the retreat that started in mid February as the stock could not overcome the resistance along the 200-day moving average and pulled back to the $34.50 range by mid March. The MACD and the RSI generated sell signals in February and then buy signals in March as SU ran back to the $40.00 range by April.

Once again the shares were not able to break through resistance as the momentum indicators signalled that sellers were taking control of the market. The central issue for June 5, 2015 will how the market reacts to OPEC’s decision to maintain its unconstrained output decision for the next six months. The cartel is scheduled to meet again in December to review market conditions.

Oil prices have recovered from the March lows but with a barrel trading in the US$58.00 range it puts pressure on high cost producers. SU has responded to lower prices by undertaking a number of measures including job cuts and putting pressure on costs.

 

 

 

 

SU2

The six-month chart provides a close-up of the overbought situation in April and the resistance near $40.00. The MACD and the RSI generated buy signals in January, sell signals in February, buy signals in March, and the sell signals in April. Currently the momentum indicators are neutral and there has been some base building near $36.00.

SU offers a dividend yield of 3.11%  which has to be weighed against the volatile trading pattern that has been in place since June of 2014 when oil prices retreated from the highs.

Next time I will study the charts for Patient Home Monitoring Corp. (PHM TSXV) for Tom.

Make it a profitable day and happy capitalism!

 

 

 

 

 

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