CONSOL Energy’s downtrend and 200-day moving average
Declining crude oil and natural gas prices over the last 18 months are dragging the entire upstream sector into a downtrend. As seen in the below chart, CONSOL Energy (CNX) is currently trading below its 50-day and 200-day moving averages by ~13% and ~61%, respectively. CNX’s stock price is in a steep downtrend where it is making a clear pattern of lower highs and lower lows.
What is worrisome about CNX’s stock price action is that instead of bouncing out of extremely stretched conditions, the current stock price appears to be in consolidation around the 50-day moving average. Typically, such consolidations are continuation patterns.
CNX has shown very little relative strength and has been getting sold off heavily when compared with other upstream stocks. Its weakness is evident in its steep 2015 decline of ~77%. Other oil and gas producers from the S&P 500 (SPY) like Pioneer Natural Resources (PXD), EOG Resources (EOG), and EQT (EQT) are down ~13%, ~16%, and ~33%, respectively.
CNX’s 3Q15 earnings
In 3Q15, excluding the one-time items, CNX reported a loss of $0.28 per share, $0.27 worse than the analyst consensus of a loss of $0.01 per share. Its revenues fell ~8% year-over-year to ~$814 million.
What do these headline numbers mean? Are these numbers good or bad for CNX? Why is CNX’s stock price in a steep downtrend and unable to rebound despite oversold conditions? We will try to answer all these questions in subsequent parts of this series by studying CNX’s earnings, past events, various fundamental ratios, and key drivers for its stock price movement.