CPG - Monstrous Rally

CPG (Crescent Point Energy) oil producer was beaten down over the years. I believe company has a lot of value and severely undervalued even at current WTI prices. Chart analysis shows that most likely CPG is likely bottoming. It producing Broadening Formation pattern accompanied with weekly RSI divergence on a high volume after very long trend down. This is the great combination for long term investment. I am advising to INVEST in it LONG term. Do not trade it but rather manage your long term position.

I will be updating this idea over time as time goes.

Note, CPG may spend more time accumulating, so need to exercise a lot of patience while it accumulating. In any case if bought inside this broadening formation the gains will be significant over 1-2 years of holding.
Comment: Yesterday when WTI dropped -3% - CPG (NYSE) rose 1%. Today we can identify Inverted Head and Shoulder pattern or Cup and Handle if you will, suggesting rally ahead and break of broadening formation coming soon.
Comment: For those who participating in this idea with me - congratulations! Today CPG broke IHS neckline on HIGH volume and more importantly closed above daily gap (window). That shows some strength in stock at least mid-term.

Next task for bulls is to break 3.43 -> 3.28 gap, which will be a resistance. Closing above it will show real strength.

Comment: Feb, 2019 - monthly candlestick is a hammer on high volume with green body. Looking forward to see a confirmation green candle in March. Watching $3.55 price for a swing high break.
Comment: Today CPG published 2018 year end results which were bad with impairment write down of ~3B of assets value. Even with this write down company is severely undervalued to my opinion.
On these negative news price dropped almost 9% but recovered with high volume printing a daily candle that looks like hammer. It is not ideal hammer but good enough for me considering its volume. It could be stopping volume appeared second time on the chart.
To my opinion, it is good opportunity to enter or add to position if we see follow up candle next couple days.
Major rally should start when we break "Gap down" area upward.
Trade active: Second attempt to break "Gap Down" but now with nice volume and Inverted Head and Shoulder (IHS) pattern ready, knocking neckline. Let's see if it breaks.
Comment: Today CPG successfully broke gap down window and closed above this. It is big victory from technical perspective. Volume confirms the break.
Next big task is to break latest pivot high at $3.55 and close the day above it leaving 4 months long accumulation range for a long waited rally.
Comment: Patiently holding this stock and accumulating position with others. This trade should give at least 100% gain.
Comment: Today we decisively broke gap down and rallied through resistance at 3.55. Next task is to break broadening formation and TL upward and continue rally. At this point we can conclude that 5 months long November -> April accumulation has been completed.
Comment: Broadening formation and red TL was broken today. Price closed above it. It is becoming too late to buy this stock. But if price decides to retest TL break it will be no-brainer entry.
Meanwhile congratulations who was accumulating this stock with me. The worst is in the past. Now we just wait for long time. Until reversal pattern shows up at the top on weekly TF. It’s more investment idea than trading idea.
Comment: “No brainer” moment I was talking about is here. It’s a good place to add or enter to long term long position. With CPG it is a rare opportunity when both fundamental and technical analysis scream BUY AND HOLD.

If drops further - buy more.

Good luck!


Really great analysis. Couldn't agree more. I'm with you on this one. Don't know if you've seen a similar canadian oil company named Baytex, It also looks like it bottomed out and is accumulating. Might be interesting to look at.
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