At SIA Charts, we compare head-to-head battles of thousands of stocks, commodities, mutual funds and exchange traded funds daily and rank them by who is winning the most in their respective universes. The top 25% are considered the Green Favored Zone, 26-50% make up the Yellow Neutral Zone and the bottom half of each league table is considered the Red Unfavored Zone.
With the prices of crude oil and natural gas pretty much in free fall for over a month now, stocks of energy producers have been tumbling down the rankings in US Equity, Canadian Equity, ETF and Equity Sector reports in recent weeks.
Tourmaline Oil (TOU.TO) spent most of this year in the green zone of the SIA S&P/TSX 60 Index Report, but its relative strength started to erode in early November. Over the last month, TOU.TO has dropped 34 spots in the relative strength rankings to 46th place, falling out of the green zone and deep into the Red Unfavored Zone. Since leaving the green zone, TOU.TO has lost 12.5% of its previous value. This three-year chart shows what appears to be a big shift from accumulation to distribution occurring in Tourmaline Oil (TOU.TO) shares. Through 2021 and the first half of 2022, the shares were in a clear uptrend but over the last eighteen months, this downshifted to a sideways trend with a $50.00 to $75.00 range emerging over that time.
Last month, Tourmaline failed once again to break through $75.00, completing what looks like a bearish double top failure. The shares have since fallen five out of the last six weeks with declines accelerating since the beginning of December. Most troubling, TOU.TO has snapped a long-term uptrend line, suggesting that a new downtrend may be starting.
Initial downside support appears near the $50.00 big round number and the bottom of the current range. A failure there would confirm the start of a downward trend with next potential support after that in the $32.50 to $37.50 zone. Initial upside resistance may appear at the recent $60.00 round number breakdown point, then the 10-week moving average near $67.25.
Since the summer of 2022, Tourmaline Oil (TOU.TO) shares have taken three runs at $75.00 resistance only to falter short of that big round number each time. The most recent failure occurred in November, at the end of a six-month advance.
In recent weeks, the shares have been backsliding, with a recent breakdown below $65.00 completing a bearish Double Bottom pattern which has signaled the start of a new downswing.
Next potential downside support may appear near $55.45, $52.25 (which corresponds with a horizontal count) and $49.25, all based on previous column lows. Initial upside resistance appears near $69.00 based on a 3-box reversal.
With a bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 2 out of 10, TOU.TO is exhibiting short-term weakness against the asset classes.
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