The share is meeting an important level. We suggest caution because this point could stop the bullish trend.

The fundamentals remain very fragile. The security seems highly overvalued compared to other securities in its sector. P/E ratio is estimated at 17.3x for this year and "EV/sales" ratio is at 2.85x.

From a technical viewpoint, the proximity of the CAD 33.6 medium-term resistance limits the upside potential on the stock. The uptrend in the short term could be stopped by this level and prices could decrease sharply in the coming sessions. Technical indicators also show an overbought situation that reinforces this bearish scenario. Thus, there is a higher downside potential than upside.

The graphical configuration argues to establish a short position at the current price. The end of the technical rebound, the consolidation phase and overbought situation: Canadian Natural Resources has all the characteristics for short selling. The first objective will be fixed near the CAD 31.1 short term support and by extension the CAD 28.7 area. This strategy should be protected by a stop loss above CAD 33.62.