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Why Is Apache Struggling with Its 100-Day Moving Average?

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Dec. 4 2020, Updated 10:52 a.m. ET

Moving averages of energy sector companies

Energy sector stocks such as ConocoPhillips (COP), Kinder Morgan (KMI), Occidental Petroleum (OXY), Phillips 66 (PSX), and Apache (APA) were trading at 11.1% below their 100-day moving averages on an average basis as of February 29, 2016. Apache was trading 11.8% below its 100-day moving average. Since November 27, 2015, the stock has struggled to cross its 100-day moving average. So the 100-day moving average is now an important resistance point for the stock.

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Apache reported its fourth quarter 2015 earnings on February 25, 2016. The company declared a loss per share of $0.06 compared to Wall Street analysts’ consensus estimate of a $0.49 loss per share. The company’s adjusted revenue was ~$1.2 billion versus analysts’ consensus estimate of ~$1.4 billion. In its 2016 guidance, Apache declared a capex (capital expenditures) budget of $1.4 billion–$1.8 billion, 60% less than the 2015 capex budget due to lower crude oil prices.

ConocoPhillips was trading at 26.9% below its 100-day moving average. However, it was trading at par with its 20-day moving average. Kinder Morgan and Phillips 66 were trading at 11.0% and 4.6%, respectively, below their 100-day moving averages. The Energy Select Sector SPDR ETF (XLE) was trading 8.8% below its 100-day moving average.

Wall Street analysts’ consensus estimates

Wall Street analysts’ consensus estimates indicate a 17.9% average upside for COP, KMI, OXY, PSX, and APA. Over the next 12 months, Apache could see an upside of 19.3% from its levels on February 29, 2016.

Wall Street analysts’ estimates for other major energy sector companies over the next 12 months are as follows:

  • ConocoPhillips could see a rise of 33.5%.
  • Kinder Morgan could see a rise of 13.6%.
  • Occidental Petroleum could see a rise of 5%.
  • Phillips 66 could see a rise of 3%.

In the next part of this series, we’ll see what the moving averages and analysts’ estimates suggest for the metals and mining sector.

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