As discussed last week, shares of Suncor Energy Inc. (SU.TO) appear to have broken out of a decades long consolidation pattern during which the stock traded between approximately $12 and $30. In the attached candlestick chart, where each candle represents a full year of price data, this consolidation range is highlighted in light green and extends back to 2005, marking nearly 20 years of sideways movement. When viewed alongside the matrix position chart, which shows SU.TO’s relative underperformance in recent years and is found near the bottom of the SIA S&P/TSX 60 report, a compelling technical development emerges. Despite its historic underperformance relative to other constituents of the S&P/TSX 60, the stock may have been quietly pushing through a long-standing resistance level. This could indicate a meaningful shift in its longer term technical trend. Also notable is the surge in volume over the past five years, which may signal growing investor interest. While the SIA Energy sector remains in the unfavored zone of the SIA Sector Report, SU.TO has recently posted its first technical improvement, earning a positive SMAX score of 7 out of 10, which is a near term measure of relative strength versus a diversified basket of asset classes. Over the past year, Suncor has delivered strong absolute performance with a 22.6% gain, closely tracking the S&P/TSX 60 Index’s 23.0% return. However, on a year-to-date and six-month basis, SU.TO has slightly underperformed, returning 17.7% year to date compared to the index’s 19.2%, and 8.8% over the past six months versus 18.9% for the benchmark. That said, Suncor has shown a notable resurgence in the most recent three-month period, returning 14.8% compared to 11.1% for the index. This may suggest the emergence of a positive trend in relative strength.
Turning to the SIA Point and Figure chart scaled at 2 percent, we can clearly see the breakout from the multi decade consolidation pattern. This began in late 2022 when shares entered the favored zone of the SIA S&P/TSX 60 Index Report and surged to $45. After a period of sideways consolidation through 2023 and 2024, shares broke out again in mid 2024, advancing into the $50 range. The stock then consolidated again in a $45 to $55 trading band, but recently pushed through a spread triple top resistance level, completing a significant technical hurdle. Upside resistance is now indicated at $71.32, based on a Point and Figure vertical count methodology. Initial support is defined at the three box reversal level of $54.05, with a secondary level at $49.93. This breakout comes despite the stock remaining in the unfavored category within the broader SIA reports. However, both the stock and the sector are showing early signs of technical improvement.
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.
