With energy stocks starting to bounce back from a sector selloff, Vermilion Energy (VET.TO) has returned to the Green Favored Zone of the SIA S&P/TSX Composite Index Report from a quick dip into the yellow zone. Yesterday, the shares finished in 53rd place, up 16 spots on the day and up 38 positions in the last week.
The technical picture for Vermilion Energy (VET.TO) continues to improve. Earlier this year, the shares completed a bullish Ascending Triangle base with a breakout over $10.00, then consolidated in a higher range between $7.00 and $11.00 for a few months. An October breakout and push toward $15.00 was followed by the recent low-volume correction where declines were contained above $11.00 as previous resistance reversed polarity to become support, a sign of continuing underlying accumulation.
The shares have started to rally up off of $11.00 on increasing volume, a sign of renewed accumulation. Initial resistance appears at the previous peak near $15.00, followed on trend by $16.50 and then $19.00 based on measured moves, and the $20.00 round number.
Vermilion Energy (VET.TO) have seen their share of ups and downs this year but their underlying trend has remained positive. In June the shares snapped out of a downtrend and following a summer correction, they broke out over $11.50 in September. In recent weeks, the shares had been sliding but that previous breakout point held as support, a bullish sign. Last week, the shares started to turn back upward, completing a bullish Double Top pattern to signal a new upswing has started.
Initial upside resistance for Vermilion appears at the previous highs near $14.95, followed by $16.50 and $19.35 based on on horizontal and vertical counts. Initial support appear near $12.00 based on a 3-box reversal.
With a bullish SMAX score of 7, VET.TO is exhibiting strength against the asset classes.
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