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Is the Uptrend in ConocoPhillips Stock Just Getting Started?

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Is the Uptrend in ConocoPhillips Stock Just Getting Started? PART 1 OF 4

Is the Uptrend in ConocoPhillips Stock Just Getting Started?

Crude oil rose, natural gas lagged

For the week ending September 29, 2017, crude oil (USO) prices rose from $50.66 per barrel to $51.67 per barrel—an increase of almost 2%. On Monday, crude oil rose ~3% but didn’t capitalize on the strong start. Currently, crude oil prices are trading above their 200-day and 50-day moving averages. On September 29, 2017, crude oil closed at $51.67, while its 200-day and 50-day moving averages stand at $49.64 and $48.84, respectively. Although crude oil’s 50-day moving average is below its 200-day moving average, the 50-day moving average is trending up and not too far away from the 200-day moving average. Natural gas (UNG) prices were slightly down last week. Natural gas prices fell from $3.021 per MMBtu (million British thermal units) to $3.007 per MMBtu.

 Is the Uptrend in ConocoPhillips Stock Just Getting Started?

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Uptrend confirmed

Due to rising crude oil prices, there was a strong positive sentiment across the energy sector. Oil and gas production companies received the maximum benefit. Last week, ConocoPhillips’s stock price rose nearly 2% or from $49.08 to $50.05. Most of the gains for ConocoPhillips stock came on Monday when crude oil prices rose ~3%. Last Friday, ConocoPhillips announced the close of its Panhandle divestiture for $184 million. ConocoPhillips plans to use the proceeds from the divestiture for general corporate purposes.

To understand the medium-term trend, you need to look at the stock’s weekly metrics. Last week, ConocoPhillips’s stock price made a weekly higher high by moving above $50.03. It was the first weekly higher high marked by ConocoPhillips since November 2016. It’s certainly a very positive technical development given that ConocoPhillips’s stock price is already trading above its 50-week moving average. As of September 29, ConocoPhillips’s stock price closed at $50.05, while its 50-week and 200-week moving averages stand at $46.27 and $52.75, respectively.

Peers

Benefiting from the sector-wide rise, the Energy Select Sector SPDR ETF (XLE) had a strong positive performance of ~2%. XLE easily outperformed the SPDR S&P 500 ETF (SPY) last week, which rose ~0.7%. Some of ConocoPhillips’s peers, which also rose last week, included Jones Energy (JONE) and Carrizo Oil & Gas (CRZO). They rose ~22% and ~19% last week.

In the next part, we’ll look at ConocoPhillips’s correlation coefficient with crude oil prices.

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