News Details – Smallcapnetwork
A New Penny Play Set for Tuesday - CVE Quietly Bucks Oil Sector Weakness
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February 2, 2024

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PDT

TGIF all. It's been a fabulous week for stocks, and now we get to enjoy a nice long weekend. Doesn't get much better than that for investors and professionals out there looking to make some money and get a break at the same time. Speaking of making some money, we've got a brand new penny stock idea slated for the open this coming Tuesday - now that the entire investing world will be back from a Summer hiatus. And, Tuesday's idea is one we're pretty excited about. Not only does this particular company have an extremely disruptive business model, it's one that literally everyone out there is going to clearly understand in a very short amount of time. It's clever and it's already starting to garner attention in the consumer world. It's not often anyone finds an idea with real homerun potential well before the rest of the herd, but if this particular idea can find a path to popularity, look out. More on this company come Tuesday. The markets have clearly gone hay wire. The last three days have been about as strong as any bull could ever ask for. Even the entire small cap sector has seen a lift in recent days - hence Tuesday's new idea. The Russell 2000 has now managed to find its way back to its 50-day moving average, so we'll see if it can continue. But, if the major averages can find new highs as soon as next week, the value and the growth opportunities in the small cap sector are pretty abundant right now - especially since it has been a bit of a laggard of late. Regardless, we have already started seeing some nice movement in many small cap names. Take one of our featured stocks in Cenovus Energy Inc. (CVE) - a developer, producer, and marketer of crude oil, natural gas liquids (NGLs), and natural gas in Canada. Its Oil Sands segment develops and produces bitumen and natural gas in northeast Alberta. This segment's bitumen assets include Foster Creek, Christina Lake, and Narrows Lake, as well as projects in the early stages of development, such as Telephone Lake. What's interesting about what I'm seeing with CVE here is although the entire oil sector continues to drag on both the DOW and the S&P 500, shares of CVE have quietly been moving higher in recent days, and more importantly appear to be in the process of building a base. I asked a very accomplished technician his thoughts on the idea this morning, and he said one more big day for the stock and it could be something traders may want to take a hard look at. There's definitely value in spotting stocks that are trading well within a sector that has not been trading well, because when an idea like that starts to take hold, and then the sector it's in also starts to behave better, it's usually a pretty lethal combination for that stock. The volume in CVE has been increasing of late too, and again it's coming at a time when nobody really cares all that much about energy stocks. But, if there's one thing I've learned over the years, it's that every single sector out there is going to have its day in the sun at some point in the future. When the whole idea behind making money in stocks is to buy low and sell high, I can definitely make an argument for CVE. When it comes to stock market smarts, there's no smarter people in North America than the Canadians when it comes to resources and commodities, so I think it's pretty safe to say CVE at least warrants a hard look right now. I want to wish all of you a very safe and happy Labor Day weekend. Now that the kids are back in school, let's get back to some real market focus.