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Cold Play: Don't Load Up on Canadian Energy Stocks

NEW YORK ( TheStreet) -- Before I analyze the Canadian oil-and-gas market and the stocks that trade in the U.S., I will describe the weekly chart for the S&P 500. If the S&P 500 (1626.13) ends this week below its five-week modified moving average at 1620.51, with its momentum (12x3x3 weekly slow stochastic) reading declining below 80.00 on a scale of 00.00 to 100.00, the weekly chart profile will shift to negative.

Chart Courtesy of Thomson/Reuters The weekly chart for crude oil ($94.78) will remain positive with a close this week above its five-week MMA at $94.28 with rising momentum. Oil is well above its 200-week simple moving average at $88.57. My quarterly value level is $79.66 with a monthly pivot at $92.32 and annual risky level at $115.23.

Chart Courtesy of Thomson/Reuters

Fundamentally the market is trading under a ValuEngine valuation warning, with 71.5% of all stocks overvalued and 32.6% of all stocks overvalued by 20% or more.

There are 558 stocks in the oils-energy sector, with only one rated strong buy and just 13 rated buy. There are 137 sell-rated stocks and 45 strong sell-rated stocks. With 32.6% of all stocks in the sector rated sell, I give oils-energy sector an underweight rating. OV / UN Valued - The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.

VE Rating - A "1-Engine" rating is a Strong Sell, a "2-Engine" rating is a Sell, a "3-Engine" rating is a Hold, a "4-Engine" rating is a Buy and a "5-Engine" rating is a Strong Buy.

Last 12-Month Return (%) - Stocks with a Red number declined by that percentage over the last twelve months. Stocks with a Black number increased by that percentage.

Forecast 1-Year Return - Stocks with a Red number are projected to decline by that percentage over the next twelve months. Stocks with a Black number in the Table are projected to move higher by that percentage over the next twelve months.

Value Level: is the price at which to enter a GTC Limit Order to buy on weakness. The letters mean; W-Weekly, M-Monthly, Q-Quarterly, S-Semiannual and A- Annual.

Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.

Risky Level: is the price at which to enter a GTC Limit Order to sell on strength.

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COSWF $7.54 -4.19%
BTE $5.10 0.00%
CNQ $30.02 0.00%


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