After spending July and August at or near the top the top of the rankings in the SIA S&P/TSX Composite Index Report, Vermilion Energy (VET.TO) has started to tumble down the rankings in the last two weeks. Earlier this week, it fell out of the green zone and into the Yellow Neutral Zone and has continued to trend downward, falling another 5 spots to 68th place.
Over this summer, a bearish Head and Shoulders Top pattern has been forming in Vermilion Energy (VET.TO) shares. Since peaking last month, the shares have come under distribution, establishing a new downtrend of lower highs. In addition, a previous uptrend support line has been broken, as well as a rising neckline. The recent drop below $30.00 can also be considered bearish.
A close below the horizontal neckline near $28.00 would complete the top and confirm the start of a new downtrend. Should that occur, next potential support may appear at previous lows in the $21.50 to $22.50 area, the $20.00 round number, and $18.00 based on a pending measured move.
A summer rally in Vermilion Energy (VET.TO) shares has come to an end. The shares have been rolling down since August and recently confirmed a downturn with a bearish Triple Bottom breakdown and a drop below $30.00.
Next potential downside support for the current downleg appears in the $27.00 to $28.65 area where previous column highs/lows, a horizontal count and an uptrend support line cluster together. Initial resistance on a bounce appears near $32.25 based on a 3-box reversal.
With its bearish SMAX score falling to 4, down from 10 at the end of August, VET.TO is exhibiting weakness against the asset classes.
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