GICS 10 EnCana Corp (ECA) (ECA) Financial Data

GICS 10 Imperial Oil Ltd (IMO) (IMO) Financial Data

GICS 10 Suncor Energy Inc (SU) (SU) Financial Data

Of course, with my expectations for Crude Oil prices to drift lower to the mid-60's for the balance of this year, and about 10 pct lower still for 1H07 based on my forecast of an economic slowdown, I pulled out of all of these stocks until such time as I believe the Bear market is over.

When I believe the time is right, I will return to these seven Canadian oil stocks at about the weightings I have indicated below.

Periodically I will publish research on the oils from some of Canada's largest and most respected broker-dealers " BMO Nesbitt, TD Newcrest, Peters & Co " in order to give readers some data to get their teeth into. But really, other than selecting a group of the highest rated companies in the industry, we have to wait for bull markets for the stock prices to move higher.

Here for example is a report from BMO Nesbitt.

From the list below, I frequently monitor the charts to see a common pattern of cycle bottoms for the Relative Strength Index technical indicator.

In a Bear market, I expect to see a constant lowering of the RSI on the Monthly and Weekly data. Periodically, when the Daily and Hourly data RSI gets below 30 and appears to be turning for the entire group, I will buy stock for a bear market corrective rally of perhaps 5 pct to 10 pct over a period of a couple weeks.

Such a rally occurred in the latter part of May, as these charts show. But nimble traders who trade this way must keep their fingers on the SELL key.

Obviously many traders are much longer term oriented. That is my primary reason for writing this particular article.

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Group Daily:

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Group Weekly:

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Group Monthly:

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The S&P/TSX Composite Index Energy Sector Weighting excluding Pipelines = 26%

Cara recommended weightings of Long-term Canadian portfolio Total Energy Holdings = 25%

I believe that global oil prices are likely to be lower than $70 for the next couple years, and that the recent high weightings ought to be trimmed a bit, but not much. There is no doubt in my mind that international portfolio managers are becoming increasingly aware of the massive pipeline infrastructure being built between Canada and the U.S., and that supplies of oil from many other parts of the world carries much higher risk than Canadian oil.

So even if global oil prices come down to the $55-$65 range for a couple years, I believe the Canadian oil industry will continue to be successful, and enjoy much higher share price peaks in future bull markets.

Here are the chart links with technical indicators to each of the "Cara 7" Canadian oils. I also indicated my relative weighting and the current rating by BMO and TD analysts.

All of these stocks can be traded in the U.S. Petro-Canada trades in the U.S. under the symbol PCZ; Canadian Oil Sands Trust trades OTCBB as COSWF, and Ensign Energy Services also trades OTCBB as ESVIF. ECA, IMO, NXY and SU are the same symbols.

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Canadian Oil Sands COS.UN 2.5% BMO (Buy), TD (Hold)

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EnCana ECA 4.5% TD (Buy), BMO (Buy), Cara 100

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Ensign Energy ESI 1.5% BMO (Buy), TD (Buy)

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Imperial Oil IMO 4.5% TD (Buy), BMO (Buy), Cara 100

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Nexen NXY 4% TD (Buy), BMO (Buy)

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Petro-Canada PCA 4% TD (Buy), BMO (Buy)

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Suncor SU 4% BMO (Buy), TD (Hold), Cara 100

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