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News

Gold surges amid US-Iran deal prospects

News

Dow hits record closing high on US-Iran peace deal hopes

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Nvidia’s stock dips despite Q1 beat, strong forecast

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CAD falls versus USD following inflation data

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Gold rises as Trump postpones Iran attack

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Crude oil surges amid stalled US-Iran peace talks

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Asset Watch

Should you cross the Enbridge?

Tuesday, April 4, 2023

As banking turmoil roiled the financial markets, crude oil was a major casualty. However, Jeff Currie, Goldman Sachs Global Head of Commodities Research, said on Mar. 31, “I have never seen a market sell-off that sharply, but retain a bullish structure.” As a result, he’s still optimistic and expects more seasonal demand in June.
Could Enbridge be a solid bet on a potential oil recovery?
For starters, the pipeline giant’s roughly 7% annual dividend yield was maintained throughout the pandemic. Showing it provides a margin of safety if a pullback arises.

Enbridge closed above its 200-week moving average on Mar. 31. During the previous two weeks, the key level was resistance, as intraweek rallies were quickly sold. Now, $37.50 is support, and it should hold unless another bank panic erupts.

 

After Enbridge recouped its 200-week MA in October, it enjoyed a 10.9% rally over the following three weeks before a consolidation ensued. As such, the setup is quite constructive.

 

Finally, Enbridge’s weekly RSI is closer to oversold than overbought, and despite the share price coming within 80 cents of its October low, its RSI remains relatively resilient. Consequently, the selling momentum has been milder this time around.

 

So, is Enbridge poised for a comeback, or does it head lower alongside the oil price?


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