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Analyzing Upstream Companies’ 100-Day Moving Averages

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Moving averages

As of December 28, 2015, the 100-day moving averages of upstream companies’ stocks showed strong resistance. For example, only Pioneer Natural Resources (PXD) managed to trade above the 100-day moving average before December 15. Now, it’s trading 7.4% below its 100-day moving average. Also, EQT (EQT) and Cabot Oil & Gas (COG) were trading 22% and 20%, respectively, below their 100-day moving averages as of December 28. Upstream companies were also trading well below their 20-day moving averages.

Pioneer Natural Resources was trading above its respective 20-day moving average until December 15. It fell 10.3% below the moving average after that. Also, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) was trading 17% below its 100-day moving average.

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Wall Street analysts’ consensus estimate

The above graph shows several upstream companies’ moving averages and forward target prices. Wall Street analysts’ consensus estimate suggests a 46% upside for these upstream companies compared to a 25% upside for large-cap refineries. Over the next 12 months, companies like EQT and Cabot Oil & Gas could see rises of 56% and 49%, respectively, from the levels as of December 18. Below you can see Wall Street analysts’ estimates for three other upstream companies over the next 12 months:

  • ConocoPhillips (COP) could see a 26% rise.
  • EOG Resources (EOG) could see a 28.6% rise.
  • Apache (APA) could see a 22% rise.

Interestingly, the forward PE (price-to-earnings) ratio for next year suggests that ConocoPhillips is comparatively cheaper than other upstream companies.

In the next part, we’ll analyze the moving averages and analysts’ estimate for midstream companies.

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