With the price of crude oil dropping back under $100.00/bbl this week, energy stocks have been falling down the relative strength rankings in both Canada and the United States. Yesterday, Canadian Natural Resources (CNQ.TO) tumbled out of the green zone in the SIA S&P/TSX 60 Index Report and into the Yellow Neutral Zone for the first time since Novembe of 2020. It finished yesterday in 24th place, down 9 spots on the day and down 21 positions in the last month.
The technical picture for Canadian Natural Resources (CNQ.TO) continues to worsen. Last month, an uptrend ended when the shares gapped down through $80.00, snapping an uptrend line, completing a bearish Rising Wedge pattern and breaking under its 50-day average, which it has remained below since. A recent bounce up from $64.00 toward $74.00 faltered at a lower high, confirming the start of a new downtrend. Yesterday, the shares broke down to a new low on trend on high volume indicating that selling pressure has intensified and a new downleg has started.
Next potential support appears in the $48.00 to $54.00 range, an area where previous highs and lows, and a measured move cluster around the $50.00 round number. Initial resistance has dropped toward $70.00.
Canadian Natural Resources (CNQ.TO) started the year off with a big rally but that came to an end last month. In recent weeks, the shares have decisively turned downward completing two bearish Double Bottom patterns, including a breakdown yesterday following a lower high that has signalled the start of a new downleg.
Next potential downside support appears at a previous breakout point and column high near $53.75, followed by the $50.00 to $48.65 area where a round number and vertical/horizonal counts cluster. Initial resistance appears near $68.15 based on a 3-box reversal.
With a bearish SMAX score of 3, CNQ.TO is exhibiting weakness against the asset classes.
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