Hello, everyone, it’s Stephen Whiteside here from theuptrend.com. In this presentation, we’re going to take a quick look at the canadian energy sector. And of course, this sector has been leading the canadian market higher in 2024 on the back of rising crude oil prices. And the reason I’m doing this video today is we’ve come up to our next price target of $87.50. And you can see that back last fall.
This is an area of congestion and resistance. It would be nice if we could punch through that and get to our next price target of 93.75. But there is some history up at this level. And while $93.75 is our next mathematical target, there is psychological resistance at the $90 level. So things are still looking pretty bullish.
But this is the time and place where you look to take some money off the table. Now, natural gas is not participating in the recent rally. It would be nice if it did, but the market’s doing pretty well without natural gas participating. Now, throughout the rest of the presentation, I’m going to be flipping back and forth between weekly and daily charts. If you’re a long term investor, then you need to be focused on the weekly charts.
And of course, if you’re a short term trader, short term investor, please focus on the daily charts. Now, if you’re not a stock picker and you want to play this sector, of course you can use the iShares ETF, the XEG, one of the most popular ETF’s traded today, hit a new high on Friday. So on the weekly chart, we’re nowhere near a sell signal right now. It’s still looking overly bullish at the moment. Year to date, this ETF is up just under 25%.
Over the last month, it’s up over 12%. In the last week, we’re up nearly 6%. So everything’s still looking pretty bullish. On the daily chart, you can see we’re nowhere near the channel, so I’m not concerned about a sell signal coming into Monday’s trading action. If you’re a more aggressive investor, you can use the Horizon BetaPro S&P/TSX Capped Energy 2x Daily Bull ETF (HEU.TO), the 2X ETF looking exactly the same as the XEG, except double the performance.
And for year to date, so far, we’re up nearly 53%. Over the last 30 days, we’re up over 27%. And the last week we’re up just under 11.5%. Again, coming into Monday’s trading action, not concerned about a sell signal for this particular ETF. Now, of course, once we do get a sell signal in the bull ETF.
We can flip over to the Bear ETF BetaPro S&P/TSX Capped Energy -2x Daily Bear ETF (HED.TO) And ride that up. I don’t know how much downward pressure there’s going to be in the energy sector or how long it’s going to last. You never know once the trend starts, how long it’s going to last. But at some point, traders and investors are going to want to take a break in this sector, and there will be a pullback. It’s just not going to start on Monday morning.
Now, moving on, looking at the Stockhouse Bullboards, we actually cover the first four stocks on this list. Unfortunately, we do not cover the last two. We’re looking at Baytex Energy (BTE.TO) Weekly chart. We were up over 11% for the week, running up to our next price target of $5.47. If you had an order in to sell up there and take partial profits, congratulations.
Our next target to the upside is $6.25. And of course, that is certainly doable. We were back there in the fall, and that is certainly potential. But so far, we haven’t broken out above the $5.47 level, so that journey has not started yet. We’ll have to wait to see if the train leaves the station in that direction.
Now, looking at a daily chart for Baytek, we actually closed unchanged on Friday. So a little bit of a weakness there, but certainly nowhere near an official sell signal. That would come on Monday with a close below $4.93. And of course, if that doesn’t happen, and I suspect it won’t on Monday, that lower channel line is going to continue to move higher daily. Then, looking at a weekly chart of Athabasca Oil (ATH.TO), this stock peaked on the previous week, and we saw a pullback.
We were down just under 2.5%, and certainly there could be a sell signal this week. If we were to close below $4.68, we ran up and hit the next target of $5.47, and we’ve. We’re starting to pull back from there. Got on the daily chart. We’re on a daily sell signal right now.
That would change on Monday with a close above $5.25. Next up, we’re looking at Tamarack Valley (TVE.TO), and it’s traded back up to the previous highs. From last fall, we were up over 9% for the week, coming up to the $4.30 level, which is our next mathematical price target, and where we topped out back in the fall. So we’ll have to see how the stock handles that once it gets there. Of course, if we can take out $4.30, then $4.69 would come into play again.
We’re looking at weekly charts here. If we go to the daily chart. You can see we closed a new high on Friday. We would need to see a close below $3.84 on Monday to give us a sell signal. Not expecting that to happen.
And of course, that lower chain line will continue to move higher daily. Next up, we’re looking at Crescent Point Energy (CPG.TO), breaking through the highs from last fall, breaking through the $11.72 level, heading towards $12.50. That’s our next mathematical price target. There you can see on Friday we closed at a new high, and on Monday we’re looking for a close below $11.05. Again, I don’t think that’s going to happen.
Let’s finish off looking at the Elephant in the Room, which is Canadian Natural Resources (CNQ.TO), and it made a new high on Friday. It’s up nearly 7% for the week, heading towards the top of our projected trading range, which is $112.50. Of course, if we break through that, we’ll calculate a new trading range, but that was our mathematical target on the weekly charts. And again, we closed at a new high on Friday, not expecting a sell signal. On Monday, we would need to see a close below $103.09.
Again, we’re not expecting that to happen. And if it doesn’t happen, that lower channel line will continue to move higher daily. Okay, folks, that is all for today’s presentation. The sector is looking really bullish. There’s an old saying that you should buy low, sell high.
Well, when is high? High is right now. We want to sell some of our position into strength. If you haven’t already done so, it would be a good time to do so. You never want to completely liquidate a position until you actually get kicked out.
We don’t know how long the trend is going to last, but what we do know is stocks usually fall three times faster than they rise. And so when there is pressure, when there is news, negative news for the sector, investors will run out a lot faster than they got in. And that usually eats into our profits fairly quickly if you haven’t already locked in some profits a along the way. Okay, folks, that’s all I wanted to cover in today’s presentation. This is the hot sector for 2024 in the canadian market.
It has been leading the market higher. I hope it can continue to go higher from here, but we’re up at 87.50 for crude oil, and we may have trouble getting past that. It is an area of resistance, and only time will tell if we can break through. The market is incredibly overbought right now, and this is the time that you want to make sure you’ve locked in some profits. You, if you haven’t already done so along the way.
Enjoy the rest of your day. Next time you’ll hear my voice is on Monday morning.
Stephen Whiteside
TheUpTrend.com
Sunday, April 7, 2024
