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EOG Resources Failed to Hold above Its 200-Day Moving Average

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EOG Resources’ 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 chart below, EOG Resources (EOG) is decidedly trading below its 50-day moving average as well as its 200-day moving average by ~17% and ~24%, respectively.

EOG’s stock price is in a downtrend, where it is making a clear pattern of lower highs and lower lows.

EOG’s stock price broke the 200-day moving average in September 2014. Since then, EOG tried to regain its 200-day moving average in April and November 2015, but it failed to hold above it.

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EOG’s weakness

EOG has shown less relative strength and has been sold off when compared with other upstream stocks. Its weakness is evident in its ~23% decline in 2015.

Other large oil and gas producers from the S&P 500 Index (SPY) include Occidental Petroleum (OXY), Cimarex Energy (XEC), and Pioneer Natural Resources (PXD). These companies fell ~13%, ~15%, and ~16%, respectively.

EOG’s 3Q15 earnings

In 3Q15, excluding the one-time items, EOG reported a profit of $0.02 per share, $0.32 better than the analyst consensus for a loss of $0.30 per share. Its revenues fell ~58% year-over-year to ~$2.17 billion.

What do these headline numbers mean? Are these numbers good or bad for EOG? Why is EOG’s stock price in a downtrend and unable to hold above its 200-day moving average? We will look at these questions in this series by studying EOG’s earnings, past events, various fundamental ratios, and key drivers for its stock price movement.

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