How Marathon Oil Stock Reacted to Its Asset Portfolio Shift




Since the news of its Oil Sands Mining divestiture and its Permian Basin acquisition broke on March 9, 2017, Marathon Oil (MRO) has seen its stock price outperform crude oil (USO) prices. Marathon Oil’s stock price rose from $14.87 to $16.16 while the price of crude oil fell from $50.28 per barrel to $48.49 per barrel during the same period.

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Did MRO’s peers also outperform?

Marathon Oil’s (MRO) peers Devon Energy (DVN) fell ~1%, and Consol Energy (CNX) and Occidental Petroleum (OXY) rose ~2% and ~1%, respectively, in the last two days. Oil and gas exploration and production companies (XOP) and the S&P 500 (SPY) have performed positively during the same timeframe.

MRO’s medium-term stock price trend

After seeing a strong 56% rise from the beginning of November 2016 to mid-December 2016, Marathon Oil (MRO) appears to have consolidated its gains since mid-December. Currently, MRO is trading below its 50-day moving average, but it’s above its 200-day moving average.

On March 10, 2017, MRO stock closed at $16.16, and its 50-day and 200-day moving averages stood at $16.76 and $15.47, respectively. The 200-day moving average often acts as a strong support level for a stock price. On March 8, MRO breached its 200-day moving average, but the news of the OSM divestiture and the Permian acquisition helped it recover.

Next, let’s analyze the possible trading range for MRO stock for this week based on its implied volatility.


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