Will Southwestern Energy Stock Start a New Rally in 2018?



Southwestern Energy stock

For the week ending December 29, 2017, Southwestern Energy (SWN) stock rose ~4.9% from $5.32 to $5.58. Southwestern Energy stock rose in the first three trading sessions of the holiday-shortened week. On Friday, the stock reversed strongly from its 50-day moving average by giving up the intraday gains of almost 4% and closed the day with a loss of ~3.1%. As of December 29, Southwestern Energy’s 50-day and 200-day moving averages stand at $5.80 and $6.22, respectively, while it’s trading at $5.58.

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Critical juncture

Currently, Southwestern Energy stock is trading between its 200-day moving average and its 52-week low of $4.90 made in October 2017. To start a new rally, its stock needs to cross above its 200-day moving average. In contrast, if Southwestern Energy loses its 52-week low, a big sell-off might ensue in the stock. In 2017, its stock fell ~48%.

Natural gas is rising

Last week, the strong increase in natural gas (UNG) (UGAZ) prices had a positive impact on Southwestern Energy stock. Natural gas (DGAZ) prices rose for the second week in a row. Natural gas prices rose from $2.66 per MMBtu (million British thermal units) to $2.95 per MMBtu.

Due to higher natural gas (UNG) prices last week, the First Trust Natural gas ETF (FCG) rose ~1.7 %. FCG outperformed the SPDR S&P 500 ETF (SPY) last week—SPY fell ~0.2%.

Next, we’ll discuss Southwestern Energy’s correlation coefficient with natural gas prices.


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