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The market was off to the races Friday as oil retreated and speculation grew that

Lehman Brothers


could be sold.

I've said before that these types of news events are certainly encouraging, but the rally to end the week was likely really spurred by panicked short-covering in the financials.

Although we do need the financials to participate in any new primary uptrend, they're not certain to lead us into a new bull market. That leadership will probably come from an entirely different sector than the leaders of the prior bull run.

As the summer is quickly drawing to a close, trading volume has dropped considerably and volatility has risen because many traders and managers have already left their desks to head to their vacation homes ahead of the Labor Day weekend. With the thin trading over the next week, we're likely to continue to seeing wild swings.

For instance, in the oil market the price per barrel dropped below $119 after jumping more than $5 Thursday. Over the next week, the support levels will need to hold if the primary uptrend is to remain intact.

I believe oil and the commodity markets have a good chance of staying in a long-term bull market for years to come. I don't like to buy into extended price moves, and I urged investors to take profits in positions before the recent correction in oil and commodities emerged. Now that oil prices are back down to their long-term support levels, I will start looking for the strongest stocks in the sector to edge back into the group.

I'm interested in companies that have pulled back to solid technical support and have compelling fundamental and growth characteristics. I especially like companies that are trading at a discount to their growth rates on a price-to-earnings basis.

One is

Suncor Energy

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, a Canadian oil and gas producer that's focused on mining the Athabasca oil sands. Its operations also include conventional oil and gas exploration, production and marketing.

Suncor is certainly one of the leaders in the oil sands, and earnings will likely continue to increase from improved operating efficiencies over the intermediate to long term. The company also has tremendous reserves, which have the potential to produce strong internal growth.

In the chart below, the top left-hand window shows that earnings are expected to expand 58% this year and 40% in 2009. Suncor also has very impressive year-over-year revenue growth -- more than 80% compared with the industry average of 30%. The company currently trades at a forward P/E ratio of 14, and that's a significant discount if those estimates continue to hold.

The bottom pane in the chart reveals the acceleration in sales growth on a quarter-over-quarter basis from 13% to 80% over the past four quarters.

From a technical perspective, the price has recently broken its three-month downtrend and cleared the important resistance levels of the 50- and 200-day moving averages. In order for this trend to stay intact, the price will need to continue to hold above $49.

The weekly chart below indicates that the long-term trend is still in place and the recent correction appears to be a buying opportunity. I also like the fact that the recent move up has come on increasing volume as the price bounced off of its long-term trend support.

That support is significant, and it's crucial for the stock to stay above that level. At this point, the price seems ready to start a new leg up.

At time of publication, Manning had no positions in stocks mentioned, although holdings can change at any time.

Mark Manning, AAMS, is an Accredited Asset Management Specialist and Registered Investment Advisor with Butler, Wick & Co., where he specializes in wealth management. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Manning appreciates your feedback;

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