It’s no secret that Canada is one of the most resource-rich nations on the planet. According to Natural Resources Canada, the country’s proven oil reserves are vast enough to meet its energy demands for 140 years at the current rate of production. Much of Canada’s oil reserves consist of oil contained in the oil sands of Alberta. However, other non-oil sands deposits are very popular across all of western Canada in what is known as the Sedimentary Basin. Provinces that will be of interest to energy investors across North America include Alberta, British Columbia, Manitoba, Saskatchewan and the Northwest Territories.
As of April 2014, Canada had an estimated 173 billion barrels of proven oil reserves. Some figures suggest that more than 95% of the reserves are located in Alberta’s oil sands. Given the extremely rich energy sector, Canadian oil stocks deserve a place in any diversified portfolio. (For more, see: Canadian Oil Production Set to Grow Rapidly.)
Easy Access Via ETF
One popular choice for American investors looking to increase their exposure to the Canadian energy sector is the Guggenheim Canadian Energy Income ETF (ENY). For those who don’t follow this ETF, the ENY fund holds 47 energy companies from across Canada each selected for their attractive yields. The ETF carries a 0.70% net expense ratio, which seems reasonable given the lucrative combination of yield and sector exposure. (For related reading, see: ETFs for Playing the Surge in Unconventional Energy.)
Taking a look at the chart, notice how the price is testing a significant level of support. This chart is an excellent example of how a level of resistance reverses its role once the price breaks above. (For a refresher on this concept, see: Support and Resistance Reversals.) Active traders will expect the trend in Canadian energy companies to remain upward until the price closes below the identified trendline. (For related reading, see: Fracking ETFs or Drilling Services Stocks?)
Suncor Energy Inc. (SU) and its .6 billion market capitalization is often viewed as the 800-pound gorilla of the Canadian energy sector. There are other large energy companies in Canada, but there are few with the scale to make deals of the magnitude of its 2009 purchase of Petro-Canada for approximately CAD17 billion. Suncor is one of the energy companies leading the way in the development of Alberta’s oil sands. The company is investing approximately 0 million per year in R&D. Investors have been rewarded over the years, as the company has consistently focused on increasing production and profitability while reducing its environmental footprint. (For more, see: Get Exposure to Canadian Oil Sands with These Stocks.)
From the technical perspective, you can see from the weekly chart that the stock is trading within a long-term bullish chart pattern. Notice how the ascending trendline has provided support ever since it notched a low of .22 back in 2008. The
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