Can MPLX LP Gain Momentum after 2Q17 Earnings?
MPLX LP’s moving averages
In this article, we’ll see whether MPLX LP (MPLX) can gain upward momentum following its strong 2Q17 earnings. Let’s start with moving averages.
MPLX LP (MPLX) surpassed both its short-term (50-day) and longer-term (200-day) moving averages due to a recent rally. This performance might indicate bullish sentiment in MPLX LP’s stock. MPLX was trading 6.8% above its 50-day SMA (simple moving average) and 3.4% above its 200-day SMA as of July 28.
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Short interest in MPLX LP
Short interest in MPLX was 13.9 million shares as of July 28, 2017. At the same time, Short interest in MPLX as a percentage of its float ratio was 7.1%, which is higher than June’s average of 6.93%. This difference might indicate bearish sentiment in MPLX. However, short interest in MPLX is in line with the last three years’ average of 7.0%.
MPLX LP’s relative strength index
MPLX LP’s RSI (relative strength index) was 71.2 as of July 28. MPLX has entered the “overbought” zone. An RSI value above 70 for a stock indicates that it is “overbought” while an RSI value below 30 indicates that a stock is “oversold.” The extreme levels of RSI value might result in a trend reversal.
MPLX LP’s implied volatility
MPLX LP’s 30-day implied volatility was 20.2% as of July 28, 2017. MPLX’s peers, Williams Partners (WPZ), Energy Transfer Partners (ETP), and Kinder Morgan (KMI) have implied volatilities of 19.5%, 24.7%, and 17.6%, respectively as of July 28. By comparison, the Alerian MLP ETF (AMLP) has an implied volatility of 14.8%.
MPLX LP might trade in the range of $34.96–$36.98 in the next seven days based on its July 28 closing price of $35.97 and assuming a normal distribution of prices. MPLX’s stock price is expected to be within this range 68.0% of the time.