Regular readers will know, as will anyone that has ever attended one of my instructional courses, that I very rarely arrive at a trade idea just by looking at a chart. Rather, I prefer to arrive at an idea in a “top down” style, starting with a big picture view of the global economy, then deciding which energy commodity or stocks will be most impacted. Only then do I look at charts, to find things that are poised to break out of a pattern and to find logical exit points for the position I am looking to put on.
Sometimes, though, even a market that is really about fundamentals is in balance, and then technical levels and patterns take on much greater importance. That is the case right now with crude. A look at the chart for WTI futures (CL) below shows a narrowing wedge, which indicates the kind of balance I am talking about, but a simple Elliott Wave analysis suggests that the next move of a couple of dollars or so in price will be quite significant.
There are two ways of looking at the waves marked by the gold arrows.
The first is that we are just entering wave three of a large bearish pattern. If that is the case, then we can expect oil to head significantly lower over the next few weeks as that wave develops and crude drops below the channel support at around $72. If, on the other hand, you treat the first gold arrow as just a range-setting move, then we are currently in the second, correctional wave of a new bullish pattern. If that…
Regular readers will know, as will anyone that has ever attended one of my instructional courses, that I very rarely arrive at a trade idea just by looking at a chart. Rather, I prefer to arrive at an idea in a “top down” style, starting with a big picture view of the global economy, then deciding which energy commodity or stocks will be most impacted. Only then do I look at charts, to find things that are poised to break out of a pattern and to find logical exit points for the position I am looking to put on.
Sometimes, though, even a market that is really about fundamentals is in balance, and then technical levels and patterns take on much greater importance. That is the case right now with crude. A look at the chart for WTI futures (CL) below shows a narrowing wedge, which indicates the kind of balance I am talking about, but a simple Elliott Wave analysis suggests that the next move of a couple of dollars or so in price will be quite significant.
There are two ways of looking at the waves marked by the gold arrows.
The first is that we are just entering wave three of a large bearish pattern. If that is the case, then we can expect oil to head significantly lower over the next few weeks as that wave develops and crude drops below the channel support at around $72. If, on the other hand, you treat the first gold arrow as just a range-setting move, then we are currently in the second, correctional wave of a new bullish pattern. If that is the case, then we will turn higher again soon and break through the resistance at around $82.
The levels to watch are marked by the white horizontal lines added to the second view of the chart, at $80.62, the high from February 13th, and $76.52, the low from February 9th.
A break of either of those levels will prompt me to trade with the momentum, short on a break of the support or long should we move above the resistance. Those levels will decide if we are in a bearish or bullish pattern, but until then, any directional trade would be the result of just guesswork.
This is a trade signal and style that is almost the opposite of what I usually prefer in several ways. Not only do I rarely trade base a trade solely on the chart as I mentioned, but I also tend to favor a contrarian style over momentum. This, though, is different.
Crude is stuck in a rut for a reason. Supply is still quite tight given OPEC policy and the continued Russian war in Ukraine, but seems to be in balance with current demand. However, there are questions about maintaining the current level of demand for oil. Central banks around the world are trying to slow growth to combat inflation, but there is always a danger that they will be too successful in that and will force major economies, and therefore the world, into a painful recession. So, the next fundamental move will be dictated by something that nobody has yet been able to figure out, how much pain developed economies will be able to bear.
So, the market is waiting for a signal from itself as to where the next big move will take us, and when enough people are focused on a level, or two in this case, a break of it can cause a quite sharp follow-on move. That could come in either direction here, and which direction it is will probably depend on traders’ opinions formed on economic data. I don’t want to guess whether that will be positive or negative at this point, so I am content to sit on my hands and wait for a move either above $80.62 or below $76.52 before joining in, then just going with the flow.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
