CNQ, Can. Nat. Resources update

 

CNQ feb 21 2014

See previous blogs- some things we got right , most we didn’t. What stands out is the B-wave. In EW terms that could imply that we are presently in a large C wave down that is taking its time. This is shown in blue. We are already going up vertically and we are close to a “logical” upper trend line level of roughly $44. The stock is trading at a p/e >20x (compared to about 13 for or RDS) and technical indicators are getting overbought. On the bullish side, (we do not believe it!) the stock could be tracing out a large triangle wave 4, with A,B,C and D complete and E still to go. Ultimately this bullish scenario should take the stock to the vicinity of $60+. Again, we do not believe it but, for the moment that is not relevant us under both scenarios the next move is down almost $15 or 30%. To put things in a historical perspective, this company had a capitalization of $1 million in 1989, compared to the $40 billion now, so it has been a stellar performer. We would sell here or use a close trailing stop-loss.