We may bounce back from here I am more optimistic this time. The general market is strong, I mean SPX. The Europe is doing it again, near death but not dead. This time it could drive more money to the US. And, the oil is up as expected. The US dollar will be stronger. But I don't agree with many who believe oil should therefore be down. The US dollar is stronger only relative to other currencies. All central banks are printing money. And, the economy is getting better slowly.
However, there is another story in the play. Canadian oil producers are disadvantaged, heavy oil and oil sands producers are even more disadvantaged. This is because our oil is exported to only one place in the world where people now are calling it Saudi America. And, the transportation is also a problem. As a result, money is pulling out from these stocks. However, I believe it is already overdone. We may see the tides turn. To me, recent upgrading of CNQ could be a signal. Of course there are good reasons for the upgrade, but good timing could be one of them. Am I wrong? or just too early? Only time can tell.
The good thing is that we are only looking for a bounce from here. I still believe that $42 is a strong support. We might go to $39-$40 or lower, but maybe not for now. If we bounce back from here, it could be a good trading opportunity. Technically, the share price is already below last month's low but RSI is far above its last low. A successful bounce back would result in a positive divergence. That is what I am looking for. Again only time can tell am I dilutional or not.