Noble Energy’s downtrend and 200-day moving average
Over the last 18 months, falling crude oil and natural gas prices have been dragging the entire upstream sector into a downtrend. Noble Energy’s (NBL) stock price is following a steep downtrend and making a clear pattern of lower highs and lower lows.
As seen in the above chart, Noble Energy is currently trading below its 50-day and 200-day moving averages by ~11% and ~20%, respectively. What is worrisome about the stock price action is that after falling below its 200-day moving average in September 2014, Noble Energy has not successfully retested its 200-day moving average in the last 13 months. In November 2015, Noble Energy bounced but failed to touch its 200-day moving average.
Noble Energy’s weakness
Noble Energy has shown very little relative strength and has been getting sold off more heavily than other upstream stocks. Its weakness is evident in its steep 2015 decline of ~29%. S&P 500 (SPY) oil and gas producers Occidental Petroleum (OXY), Pioneer Natural Resources (PXD), and EOG Resources (EOG) are down ~13%, ~16%, and ~23%, respectively.
Noble Energy’s 3Q15 earnings
In 3Q15, excluding the one-time items, Noble Energy reported a loss of $0.21 per share, $0.03 worse than the analyst consensus of $0.18 per share. Its revenues fell ~37% year-over-year to ~$801 million.
What do these headline numbers mean? Are these numbers good or bad for Noble Energy? Why has its stock price been following a steep downtrend and unable to touch its 200-day moving average? We’ll try to answer these questions in subsequent parts of this series, focusing on Noble Energy’s earnings, past events, various fundamental ratios, and key drivers for the stock price movement.