Today we will visit the charts of Tourmaline Oil Corp. (TOU.TO) against the backdrop of the Natural Gas Continuous Contract (NAT.GAS). Starting first with Tourmaline, we find a low relative strength stock that has been consolidating for the better part of four years, where investors have seen shares move in a consolidation pattern between approximately $45/share and $65/share on the upper end. Currently trading at the high level of the range at $64.33, shares have most recently been under a period of price discovery with the formation of a point-and-figure triangle, where it appears to have settled to the upside (see black arrow), with the bulls taking the upper hand at a pivotal time. Share prices might now be eyeing the upper and final resistance levels at $67.06 and $69.77, where the shares would break out to an all-time high. Should share prices correct once again, support might begin to materialize at $57.23, $51.84, and $47.89, all outlined on the attached point-and-figure chart.
From a relative strength perspective, however, shares of TOU.TO have continued to be underperformers, and this can be observed in the attached SIA matrix position table, where a black line has been drawn against the tops. Any move into even the neutral yellow zone might indicate another positive change from a relative strength perspective, over and above the completion of a bullish triangle. SIA SMAX, another near-term measure of relative strength against a basket of alternative asset classes, is still negative given the 5 handle. Another important piece of data on the point-and-figure chart is the sector color, which is showing yellow or neutral. This gives the reader a quick backdrop of sector relative strength. Here, energy being yellow means the sector is in the neutral zone of the SIA Sector Matrix, which has recently rallied up the report from deep in the red, unfavored zone. While this reading is still not the optimal green, it is one of the top relative strength gainers within the report.
Tourmaline Oil is primarily a natural gas company, not an oil company. Despite its name, the firm has built its reputation as Canada’s largest natural gas producer, with oil and natural gas liquids making up a smaller portion of its portfolio. As such, let’s take a moment to set a backdrop of TOU.TO stock against the commodity that it supplies to the market, via the Natural Gas Continuous Contract (NAT.GAS). The attached point-and-figure chart has been scaled at 3% to provide a good view of the last five years of natural gas trading. Here we find a commodity breaking out past recent resistance at both $4.31 and $4.57 with the completion of a double and spread double top. Resistance might reemerge at the $5.30 level and $5.62 level, both dating back as far as 2021, with another zone of resistance highlighted between $6.33 and $6.52. Support, on the other hand, will initialize on the point-and-figure chart at the three-box reversal level of $4.31, with a zone of support between $3.61 and $3.72. In this case, NAT.GAS has a perfect SMAX score of 10 out of 10, which indicates that it is outperforming cash, bonds, equities, currencies, and other commodities.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
