Oil & Gas producer MEG Energy (MEG.TO) has joined several of its peers in soaring back up the rankings in the SIA S&P/TSX Composite Index Report. Yesterday, MEG.TO completed a round trip between the Green Favored Zone and the red zone, re-entering the top 25% of the report for the first time since June. MEG.TO finished yesterday in 51st place, up 44 spots on the day and up 88 positions in the last month.
A major breakout is underway in MEG Energy (MEG.TO) shares. A downward trend that started in June shifted into a sideways trend over July and the early part of this month after the selloff was contained by previous support near $14.50. Since successfully retesting that level, the shares have been under renewed accumulation and the technical picture has turned increasingly bullish. In particular, this week, the shares regained their 50-day average and then broke out of a base on rising volumes, a sign of increasing investor interest.
Potential upside resistance tests on trend appear near the $20.00 round number, then $22.50 where a previous peak and a measured move from the $14.50 to $18.50 base converge. Initial support moves up toward the $18.50 breakout point from the 50-day average near $17.25.
It had been a tough summer for MEG Energy (MEG.TO) until earlier this month, but in the last few days, a major turnaround has started. A drive down below $15.00 failed to hold with the shares returning to their previous $15.50 to $17.90 range and a low pole warning calling off a previous triple bottom. Now, the shares have broken out over $17.90, completing a bullish Triple Top pattern and signaling the start of a new recovery trend.
Initial upside resistance appears in the $20.00 to $20.15 area, where a round number, horizontal count, and previous resistance cluster, followed by $22.20 based on a previous column high. Initial support appears near $17.15 based on a 3-box reversal.
With a bearish SMAX score of 5, MEG.TO continues to exhibit weakness against the asset classes for the moment.
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