Chevron’s moving averages
In this part, we’ll look at Chevron’s (CVX) moving averages. Let’s start with its moving averages in the first nine months of 2017.
In the beginning of 2017, Chevron’s 50-DMA (day moving average) slid down but stayed above its 200-DMA. The downtrend in Chevron stock extended to 2Q17. As WTI (West Texas Intermediate) fell, Chevron stock followed, and its 50-DMA broke below its 200-DMA.
In the third quarter, Chevron posted its 2Q17 earnings, which beat estimates. Plus, WTI prices rose as the effects of Hurricane Harvey faded. By the end of 3Q17, Chevron’s 50-DMA crossed over its 200-DMA. Short-term moving averages crossing over longer-term averages is seen as a bullish technical sign.
Chevron’s moving averages since October 2, 2017
Since October 2, 2017, Chevron’s 50-DMA has stayed above its 200-DMA and risen consistently. CVX’s 50-DMA, which stood just 0.9% above its 200-DMA on October 2, now stands 8.7% above its 200-DMA. The rise in Chevron’s 50-DMA is due to its stock rising steeply in the quarter, which we discussed in the previous part of this series.
Currently, Chevron’s 50-DMA is 8.7% above its 200-DMA. Any positive news on oil prices could cause Chevron stock and its 50-DMA to move up further, widening the gap between it and the 200-DMA. Also, if the company posts better-than-expected 4Q17 earnings, Chevron’s stock price could rise further. Chevron is expected to post its 4Q17 earnings on February 2, 2018.
Peers’ moving averages
Like Chevron’s 50-DMA, Petrobras’s (PBR), ENI’s (E), and Suncor Energy’s (SU) 50-DMAs are 9%, 4%, and 9%, above their 200-DMAs, respectively. PetroChina’s (PTR), YPF’s (YPF), and Statoil’s (STO) 50-DMAs are 6%, 2%, and 12% above their 200-DMAs.
The SPDR Dow Jones Industrial Average ETF (DIA) and the SPDR S&P 500 ETF (SPY) broadly mirror the overall economy, which includes several industries. DIA’s and SPY’s 50-DMAs are 9% and 7%, respectively, above their 200-DMAs. In the next part, we’ll forecast Chevron’s stock price.