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Has ConocoPhillips Stock Started a New Uptrend?

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Crude oil prices trying to rebound

For the week ended February 16, 2018, crude oil (USO) (USL) prices rebounded significantly from $59.20 per barrel to $61.55 per barrel, an increase of ~4%. On Friday, February 16, crude oil prices closed marginally above their 50-day moving average. That day, crude oil’s 50-day moving average was $61.30. If crude oil fails to sustain above its 50-day moving average, it could head towards the more stronger support of its 200-week moving average. Crude oil’s 200-week moving average acted as a strong resistance in 4Q17. According to classic technical analysis rules, when a strong resistance is cleared by commodity prices, it acts as a support in the future to commodity prices. As of February 16, crude oil’s 200-week moving average was $56.06.

Last week, natural gas (UNG) prices declined for the third week in a row. They fell from $2.58 per MMBtu (million British thermal unit) to $2.56 per MMBtu.

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ConocoPhillips stock at a resistance

Due to the strong increase in crude oil prices, COP stock increased significantly last week by more than 5%, from $52.02 to $54.65. The stock rose on Monday and Wednesday, but on Wednesday, the rise faced resistance at its 50-day moving average. As of February 16, COP was trading at $54.65, whereas its 50-day moving average and 200-day moving average were $55.75 and $48.71, respectively.

In December 2017, a correction in COP stock ended when it regained its 50-day moving average. If COP stock regains its 50-day moving average this week, there’s a possibility that the current correction in COP has already ended.

Peers

Due to higher crude oil prices last week, the Energy Select Sector SPDR ETF (XLE) produced a positive performance of ~2%. However, XLE underperformed the SPDR S&P 500 ETF (SPY) last week, which rose ~4%.

Some of COP’s peers that also outperformed the Energy Select Sector SPDR ETF (XLE) included Pioneer Natural Resources (PXD) and EOG Resources (EOG), which rose ~8% each last week.

In the next part, we’ll look at COP’s correlation coefficients.

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