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Is Downtrend in ConocoPhillips Stock Just Getting Started?

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Crude oil and natural gas fell

For the week ending November 17, 2017, crude oil (USO) prices fell marginally from $56.76 per barrel to $56.71 per barrel, a decrease of 0.05%. Crude oil prices were almost unchanged on Monday. However, crude oil prices were volatile for the remainder of last week. Crude oil prices fell strongly on Tuesday and Wednesday and bounced back on Thursday and Friday, forming a reversal candle on the weekly chart. On November 17, 2017, crude oil closed at $56.71, whereas its 50-day and 200-day moving averages stand at $52.42 and $49.73, respectively. Currently, crude oil’s 50-day moving average stands above its 200-day moving average, a positive technical development. Natural gas (UNG) prices were down sharply last week. Natural gas prices fell from $3.21 per MMBtu (million British thermal units) to $3.10 per MMBtu.

ConocoPhillips’s stock follows through but on the downside

Due to lower energy prices, COP’s stock fell 5.4%, or from $52.99 to $50.13, last week. Last week’s decline appears to be a follow-through on the downward reversal candle formed in the week before.

COP’s stock fell on all five days of the week with the majority of the decline coming on Tuesday and Wednesday. However, currently, COP’s stock is trading just above its 50-day moving average and might find support at this level. On November 17, ConocoPhillips stock closed at $50.13, whereas its 50-day and 200-day moving averages stand at $49.83 and $46.50, respectively.

Peers

Due to a decline in energy prices last week, the Energy Select Sector SPDR ETF (XLE) returned -3.2%. XLE widely underperformed the SPDR S&P 500 ETF (SPY) last week, which also fell 0.09%. Some of COP’s peers that also fell sharply last week include Pioneer Natural Resources (PXD) and Marathon Oil (MRO). PXD and MRO fell ~4% and ~3% last week, respectively.

In the next part, we’ll look at COP’s correlation coefficient with crude oil prices.

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