Skip to main content
Access every election story that matters
Enjoy unlimited digital access
$1.99
per week for 24 weeks
Access every election story that matters
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
// //

Pumpjacks at work pumping crude oil near Stettler, Alta., June 20, 2007.

Larry MacDougal/The Canadian Press

Hi Lou,

Love your column and the easy to follow analysis.

How about Strategic Oil and Gas? Not that long ago many analysts recommended a buy. Then it tanked and is not showing many signs of life. What's your take?

Story continues below advertisement

Thanks very much,

Adrian

Hey Adrian,

Thanks for the assignment and your kind words.

Strategic Oil & Gas Ltd. has been in a serious selloff since February of 2013 when it traded near $1.40. By March of 2013 the shares began a concerted retreat down to just below $0.50 in May, 2014. That's a lot of ground to give up but also certainly enough time to make a decision to sell the stock and preserve capital.

Scrutinizing the charts will help identify if SOG can lift itself out of the downtrend.

The three-year chart depicts an established downtrend with resistance along the 50-day moving average all along the retreat. The death cross that formed in late June of 2013, when the shares were trading near $1.10, offered another signal that sellers were in control of the market and that we could expect more downward pressure to follow. Finally, the series of lower highs and lower lows over the last year served as another warning to investors that the downtrend was not about to reverse itself. Worth noting is that there have been some sharp but short lived rallies over the course of the decline but nothing that led to a trend reversal.

Story continues below advertisement

The six-month chart provides a close-up of the sell signals generated by the MACD and the RSI in early January of 2014 when the stock hit resistance along the 50-day moving average near $0.80. The momentum indicators then signalled a buy in late January when the shares were trading near $0.45 and coming out of an oversold situation. SOG ran to just below $0.65 where once again it hit resistance along the 50-day moving average. Since late February the stock has been meeting resistance near $0.50.

Nothing in the analysis suggests that now would be a good time to buy. I did notice that a number of analyst have recently cut their target prices for the stock which is another reason to keep your powder dry.

Make it a profitable day and happy capitalism!

Have your own question for Lou? Send it in to lou@happycapitalism.com.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies