What to Make of ConocoPhillips’s 8-Session Climb
Crude oil gained but natural gas lagged
In the week ending September 22, 2017, crude oil (USO) prices rose from $49.89 per barrel to $50.66 per barrel—an increase of ~1.5%. On September 14, 2017, crude oil conquered its 200-day moving average and gave a higher high on daily price metrics.
Capitalizing on this positive technical posture, on Tuesday, crude oil found support at its 200-day moving average and rallied. Crude oil’s 200-day and 50-day moving averages now stand at $49.63 and $48.32, respectively.
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Natural gas (UNG) prices were flat last week, falling slightly from $3.024 per MMBtu (million British thermal units) to $3.021 per MMBtu.
COP’s stock performance
Due to rising crude oil prices, there was a strong positive sentiment across the energy sector last week, with oil and gas production companies receiving the maximum benefit. Last week, ConocoPhillips (COP) stock showed a strong rising trend on all five days of the week, increasing from $46.51 to $49.08.
But to understand the medium-term trend, we have to look at the weekly metrics of the stock. On the weekly chart, COP’s stock still has some more work to do to turn the picture bullish. On September 22, although COP was trading above its 50-week moving average, it had not marked a higher high on weekly chart since December 2016.
COP stock will likely mark a weekly higher high when it moves above $50.03. COP stock is now trading below its 200-week moving average. On September 22, the stock closed at $49.08, while its 50-week and 200-week moving averages stood at $46.09 and $52.82, respectively.
Benefitting from the sector-wide rise, the Energy Select Sector SPDR ETF (XLE) produced a strong positive performance of ~2%, outperforming the SPDR S&P 500 ETF (SPY) last week, which rose a marginal ~0.1%. Peers California Resources (CRC), W&T Offshore (WTI), and Jones Energy (JONE) rose ~20%, 18%, and ~17%, respectively, last week.
In the next part of this series (below), we’ll examine COP’s correlation coefficient with crude oil prices.