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MEG Energy Corp (MEG.TO) - February 27, 2024

While the price of oil has been stuck in the $70s, energy stocks have been attracting renewed interest and working their way back up the rankings in the SIA S&P/TSX Composite Index Report. MEG Energy Corp. (MEG.TO), for example, has been increasing in relative strength since the start of this year, climbing up off of the yellow-red zone boundary and returning to the Green Favored Zone for the first time since early December. Yesterday, MEG.TO finished in 45th place, up 16 spots on the day and up 55 positions in the last month.

Candlestick Chart Resumes its Upward Trend:

Earlier this year, MEG Energy (MEG.TO) successfully tested support in the $23.00 to $24.00 area, keeping a long-term uptrend, which has been running for over two years now, intact. In recent weeks, accumulation has resumed with the shares breaking out over $26.00 and snapping a short-term downtrend line. A close above $28.00 would signal that the current consolidation phase has ended and accumulation has resumed.

In addition to the $30.00 round number, measured moves suggest potential upside resistance tests on trend could appear near $29.00, then $34.00, the last based on a large Ascending Triangle breakout from last summer. Initial support appears at the 10-week moving average just below the $25.00 round number.

Point and Figure Chart Shows Continuing Accumulation:

MEG Energy (MEG.TO) has been under steady accumulation since the fall of 2022, consistently advancing in a Rising Channel of higher highs and higher lows. Toward the end of last year, the shares pulled back in a normal correction, which was contained by trend support.

In recent weeks, accumulation has resumed. MEG.TO has broken out of a short-term downtrend, completing bullish Double Top and Spread Double Top breakouts. Currently, MEG.TO is bumping up against its November peak.

A close above $28.15 would signal the start of a new upleg with next potential resistance in the $33.65 to $34.50 area where horizontal and vertical counts converge. Initial support appears near $25.00 where a round number and a 3-box reversal converge.

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 9 out of 10, MEG.TO is exhibiting short-term strength against the asset classes.

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