Cenovus Energy Inc. (CVE) was upgraded by TheStreet.com’s quantitative service today, so we became curious what the charts and indicators looked like. Here’s what we found.
In this daily bar chart of CVE, below, we can see a strong rally over the past four weeks that has brought prices back to the underside of the declining 200-day moving average line. Prices have been above the rising 50-day average line since the beginning of September. We can see a small lopsided double-bottom pattern with lows in late June and late August.
The On-Balance-Volume (OBV) line makes its low in June along with the price action. Heavier volume of trading since early April suggests that some investors dumped positions while others used the weakness to become buyers. There is a bullish divergence from April to August as the momentum study makes higher lows in April, June and August versus lower lows in price.
In this weekly bar chart of CVE, below, we can see the recent price improvement compared to the lengthy decline. Prices have rallied to the underside of the declining 40-week moving average line. Chart resistance does not enter the picture until the $13-$16 area.
The weekly OBV line has stabilized since June and the Moving Average Convergence Divergence (MACD) oscillator crossed to the upside from below the zero line in July, for a cover-shorts buy signal.
In this Point and Figure chart of CVE, below, we can see the rebound this month (look for the “9” on the chart). The chart projects a possible upside target of $12.40, but chart resistance is not seen until $13.02.
Bottom line: CVE is extended in the short run and could pull back to around $9 or so. Aggressive traders could look to buy a pullback towards $9.00, risking below $8. And $13 could be seen when the next rally gets underway.