In our December 20, 2024, note we highlighted Cenovus Energy as an underperformer in both absolute and relative terms. At the time, the stock was down -3.17% for the year, trailing the S&P/TSX Composite Index by over 19 percentage points. This relative weakness, combined with a poor SMAX score of 0 and a weak technical profile, placed CVE.TO near the bottom of the SIA S&P/TSX 60 Index Report. We also pointed to the bearish tone in crude oil prices, which were consolidating near critical support levels, adding further pressure to Cenovus’s outlook. Technically, CVE.TO was rangebound with key overhead resistance levels at $22.77 (3-box reversal), $24.65 (3-year resistance), and a top-end zone around $27.21. Support had been established in the $18.68–$19.82 area, with a final line of defense down at the trendline support of $15.02. These levels were clearly visible on the point-and-figure chart included in our original analysis, and that same chart is displayed again here for reference.
Today, as we revisit Cenovus, we can now see that the critical levels mentioned late last year have indeed broken, with shares down another -8.49% in the past 6 months, though they were down much more at the trough. Since then, shares have gained 18.29% over the past 3 months. It is surprising how often, in point and figure analysis, support and resistance levels prove accurate; in this case, the final line of defense at $15.02 from the December 20 report was the exact level at which the stock bounced.
Technically, little has improved with CVE.TO shares, which remain buried deep in the unfavored zone of the SIA S&P/TSX 60 Index Report at position #50. Having broken its positive trendline, the stock has now rallied back to the now negative trendline and is testing a notable level of resistance at $20.63. If this level is penetrated, shares may still need to contend with 3 years of resistance and the stubborn upper band of $23.69–$24.69. Support, meanwhile, now sits at the 3-box reversal level of $18.68, with the prior trough-level support at $14.73. The only improvement from a technical perspective is the now-positive SMAX score of 6, which SIA practitioners recognize as a near-term technical reading of relative strength versus other asset classes such as cash, bonds, currencies, commodities, and equity indexes.
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