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Will Friday’s Reversal Mark the End of MRO’s Downtrend?

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Weekly performance

For the week ending August 18, 2017, Marathon Oil’s (MRO) stock price fell ~10% from $12.07 to $10.87. MRO’s stock price is making a pattern of lower highs and lower lows in fiscal 2017. Last week, MRO’s stock price declined on first four days of the week, though Friday marked a textbook reverse candle on the daily timeframe.

On the weekly timeframe, MRO’s stock is trading below its 50-week and 200-week moving averages. On August 18, 2017, MRO’s stock price closed at $10.87, while its 50-week and 200-week moving averages stand at $14.80 and $21.84. MRO’s stock price is now ~27% below its 50-week moving average.

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Crude oil and natural gas prices

For the week ending August 18, 2017, crude oil (USO) prices retreated from $48.82 per barrel to $48.66 per barrel—a fall of less than one percentage point. Crude oil prices are now trading below their 200-day moving average, which stands at $49.42.

Last week, crude oil prices found support at their 50-day moving average, which currently stands at $46.53. Natural gas (UNG) prices fell ~3% last week, decreasing from $2.98 per MMbtu (million British thermal units) to $2.89 per MMbtu.

Peers

Marathon Oil primarily operates in US resource plays and international locations. Peers ConocoPhillips (COP), Devon Energy (DVN), and Diamondback Energy (FANG), which also operate in US resource plays, fell ~4%, ~4%, and ~6% last week. Like MRO, Devon Energy has operations in the Oklahoma Resource Basin, while ConocoPhillips and Diamondback Energy are active in the Permian Basin.

In general, for the week ending August 18, crude oil (USO) and natural gas (UNG) exploration and production companies (XOP) have underperformed the S&P 500 ETF (SPY). Although the S&P 500 ETF fell marginally by 0.58% last week, XOP fell more than 3%.

In the next part, we’ll take a look at MRO’s implied volatility.

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