Shares of Suncor Energy (SU) were raised to an "outperform" fundamental rating by a sell-side firm Tuesday. Canada-based Suncor extracts, produces and provides energy from a mix of sources, ranging from oil sands to wind and renewable fuels.
Let's check out the charts and indicators to see if there is any alignment with the fundamentals.
In the daily bar chart of SU, below, we can see that the stock price corrected in recent days. The rising 50-day moving average line was broken, briefly, as prices have bounced back above the 50-day line Tuesday.
The On-Balance-Volume (OBV) line has made a U-turn to the downside and the Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profit sell signal.
In the weekly Japanese candlestick chart of SU, below, we can see a recent top-reversal pattern with a clear doji pattern followed by a long red (bearish) candle. The slope of the 40-week moving average line is positive and intersects around $29.
The weekly OBV line has been strong since September but the trend-following MACD oscillator is poised for a downside crossover and take profit sell signal.
In this daily Point and Figure of SU, below, we can see that prices reached a downside price target in the $35 area.
In this weekly Point and Figure chart of SU, below, we can see a longer-term price target in the $45 area.
Bottom-line strategy: If you look at the trading pattern for SU on the daily bar chart (above) you can see that corrections or pullbacks have been short-lived affairs. This time I believe the correction in SU (and other energy names) will be longer but not necessarily deeper. Traders should expect SU to trade sideways for a number of weeks before renewed gains. Patience before buying.
