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 going into retreat over the last several weeks, energy producers have been rolling over and increasingly underperforming stocks in other sectors. Declines in the relative strength rankings and especially zone crossings can act as warnings of a stock starting to lose relative strength.
Suncor Energy (SU.TO), for example, fell out of the green zone of the SIA S&P/TSX Composite Index Report on November 8th. Since leaving the green zone, SU.TO is down 4.4%. In contrast, the S&P/TSX Composite Index is up 5.1% over the same period. SU.TO entered the Red Unfavored Zone on December 6th and has continued to slide down the rankings. In the last month, Suncor has dropped 27 positions to 45th place, including a decline of 6 spots last week. This three-year chart shows how Suncor Energy (SU.TO) shares have started to sell off within their primary $34.00 to $50.00 sideways range. Note how in recent weeks, the shares have been declining on increasing volumes, a sign of growing selling pressure. Last week, SU.TO decisively broke down below $42.00, a sign that a new downswing has started. Downside resistance appears near previous lows at the bottom of the current trading range in the $34.00 to $36.00 zone. Initial upside resistance appears near $45.00.
Suncor Energy (SU.TO) has been trending sideways in a range between $34.00 and $50.00 since a big rally peaked back in June of 2022. A summer upswing within this range topped out in a bull trap back in September when it broke out by one row and then reversed downward. Since then, the shares have been backsliding, establishing a lower high and then breaking down outright and completing a bearish Double Bottom which signaled the start of the current downswing. Previous column lows suggest potential downside support may appear near $37.70, $36.25, or $34.20 on trend. Initial resistance may emerge near $44.20 based on a 3-box reversal. With a bullish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 6 out of 10, SU.TO is still exhibiting short-term strength against the asset classes, but that would turn bearish on any further declines to 5 or less.
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