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Could WPX Energy’s Stock Rally Be near Its End?

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WPX Energy’s reversal to the upside

For the week ending December 8, 2017, WPX Energy’s (WPX) stock price fell ~1.3% from $13.08 to $12.91. The key highlight of the week was WPX’s stock price reversed sharply mid-week and formed an upside reversal candle on the weekly chart. This reversal also helped WPX to stay above its 200-week moving average, which it crossed just two weeks back.

In the past, the 200-week moving average acted as a critical level for WPX Energy’s stock price trends. In January 2017, WPX’s failure to stay above this critical moving average ended its 2016 rally after gaining almost 539%. Even now, WPX Energy has been in a strong uptrend since June 2017. It has gained ~54% since then. As long as WPX Energy’s stock holds above its 200-week moving average, the stock is likely to gain further.

Crude oil turned down from resistance

For the week ending December 8, 2017, crude oil (USO) prices fell from $58.95 per barrel to $57.36 per barrel, a decrease of ~1.7%. Crude oil prices were down in the first three days of the week. However, crude oil prices increased strongly on the last two days of the week and formed a reversal candle on the weekly chart. However, crude oil prices lost their 200-week moving average last week, which was regained just two weeks back. Currently, crude oil’s 200-week moving average stands at $58.06.

Natural gas (UNG) prices were down strongly last week. Natural gas prices fell from $3.06 per MMBtu (million British thermal units) to $2.77 per MMBtu.

Peers

Due to weak energy prices last week, the Energy Select Sector SPDR ETF (XLE) produced a negative performance of ~0.6%. XLE underperformed the SPDR S&P 500 ETF (SPY) last week, which increased modestly by ~0.4%.

Some of the WPX’s peers that also outperformed crude oil last week included Pioneer Natural Resources (PXD) and Marathon Oil (MRO). PXD fell modestly by ~0.8%, whereas MRO rose ~0.5% last week.

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

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