Since we last mentioned Cenovus Energy (CVE.TO) in the January 6th edition of the Daily Stock Report, the shares have climbed 42.0%. Continuing to rebound from a dip down into the yellow zone, Cenovus continues to climb within the Green Favored Zone of the SIA S&P/TSX 60 Index Report finishing yesterday in 3rd place up 5 spots on the day.
This three-year Cenovus Energy (CVE.TO) chart provides two textbook examples of how support and resistance levels can reverse polarity or toggle back and forth once broken. Cenovus spent two months trading between $9.00 support (a former resistance level) and $10.75 resistance (a former support level), before recently embarking on a new upleg with a breakout.
Initial upside resistance appears near $12.50, followed on trend by $14.25 where two measured moves and the summer 2018 high cluster, then the $15.00 round number. Initial support appears near $10.75, the previous resistance level which has reversed polarity once again.
Over the last six weeks, a consolidation phase for Cenovus Energy (CVE.TO) shares which had started in March, came to an end with the shares staging a series of breakouts completing a bullish Double Top pattern, then a bullish Spread Double Top, then a larger Double Top. Earlier this month, the shares broke through their March peak, confirming the start of a new upleg that continues today with the emergence of a high pole.
Next potential upside resistance appears in the $13.60 to $14.15 area which includes previous highs dating back to the summer of 2019 and a horizontal count, followed by the $15.00 to $15.35 area where a round number and a vertical count converge. Initial support appears near $10.95 based on a 3-box reversal.
With a perfect SMAX score of 10, CVE.TO is exhibiting strength across the asset classes.
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