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Marathon Oil’s Stock Reacted to Bolt-On Permian Acquisition

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Underperformance

Since news of the bolt-on Permian acquisition on March 21, 2017, Marathon Oil (MRO) saw its stock price underperform crude oil (USO) prices. Marathon Oil’s stock price fell from $15.48 to $14.61. Crude oil prices fell from $48.91 per barrel to $47.97 per barrel during the same period.

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Marathon Oil’s peers

Marathon Oil’s peers Devon Energy (DVN) and Occidental Petroleum (OXY) fell ~4% and ~1%, while Consol Energy (CNX) has been flat in the last four days. Oil and gas exploration and production companies (XOP) underperformed the S&P 500 (SPY) in the last four days.

Marathon Oil’s stock price 

After rising 56% from the beginning of November 2016 to mid-December 2016, Marathon Oil appears to be in a moderate downtrend since mid-December. Currently, Marathon Oil is trading below its 50-day and 200-day moving averages. On March 24, 2017, Marathon Oil’s stock price closed at $14.61, while its 50-day and 200-day moving averages stand at $16.28 and $15.56, respectively. Many times, the 200-day moving average acts as a strong support level for the stock price. Last week, Marathon Oil breached the important support level.

In the next part, we’ll analyze the possible trading range for Marathon Oil stock for this week based on its implied volatility.

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