With the prices of crude oil and natural gas in retreat, energy producing stocks have started to slide back down the rankings in the SIA S&P/TSX Composite Index Report. Paramount Resources (POU.TO) for example, completed a summer round trip between the Red Unfavored Zone and the green zone last week. On Friday, after the shares lost 10.1% of their value, POU.TO fell 61 positions to 144th place.
A major breakdown is underway in Paramount Resources (POU.TO) shares. On Friday, the shares staged a breakaway gap downward and broke under $25.00 (a round number and neckline) to complete a bearish Head and Shoulders Top. This action not only confirms that the downtrend which started back in June continues, it appears to be accelerating.
Next potential downside support appears in a range between the $20.00 round number and previous support near $18.00. Initial rebound resistance appears near the $25.00 round number and breakdown point.
Back in June, Paramount Resources (POU.TO) shares peaked and staged an initial selloff. Paramount then spent the summer consolidating between $26.00 and $32.00. In the last few days, the shares have started to sell off and break down again to confirm the start of a new downtrend. A bearish Double Bottom breakdown which was followed by a bearish Spread Triple Bottom breakdown has extended into a bearish Low Pole.
A cluster of horizontal counts suggests initial potential support near $20.70, then the $20.00 round number and $19.50 based on a vertical count. Initial rebound resistance appears between $25.00 and $26.80 where a round number, 3 box reversal, recent breakdown point, and previous column highs/lows cluster.
With its bearish SMAX score falling to 1, POU.TO is exhibiting weakness against the asset classes.
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