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What Do Marathon Petroleum’s Moving Averages Indicate?

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Mar. 12 2018, Published 1:45 p.m. ET

Marathon Petroleum’s moving averages in the past four quarters

In 1Q17, Marathon Petroleum’s (MPC) 50-day moving average was higher than its 200-day moving average. In 2Q17, MPC’s 50-day moving average fell but remained above its 200-day moving average. This was likely in anticipation of the company’s earnings.

Marathon Petroleum stock continued its uptrend in 3Q17, but upon the company’s announcement of its 2Q17 results—which reflected a fall in its refining operating earnings—its stock fell. Marathon Petroleum stock broke below its 50-day moving average but soon recovered due to the strengthening refining environment as a result of Hurricane Harvey. Marathon Petroleum stock continued to rise in 4Q17. This led to a steep surge in MPC’s 50-day moving average in 4Q17.

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Marathon Petroleum’s moving averages in 1Q18 so far

Amid volatility, Marathon Petroleum stock has risen marginally in 1Q18. As the stock rose early in the quarter, its 50-day moving average also surged. MPC’s 50-day moving average stood 16.5% above its 200-day moving average on February 1, 2018. However, MPC stock fell in February, presumably led by the weaker broader market and various other factors, which we discussed in the previous article. This resulted in the contraction of the gap between these moving averages.

Currently, Marathon Petroleum’s 50-day moving average is trading 14.8% above its 200-day moving average.

Peers’ moving averages

Like MPC, Andeavor’s (ANDV), Valero Energy’s (VLO), and Phillips 66’s (PSX) 50-day moving averages are trading 4.9%, 19.5%, and 9.2%, respectively, above their 200-day moving averages. As the 50-day moving averages of these stocks are much higher than their 200-day moving averages, the fear of their 50-day moving averages breaking below their 200-day moving averages is almost nonexistent.

The SPDR Dow Jones Industrial Average ETF’s (DIA) 50-day moving average is trading ~9.3% above its 200-day moving average.

To learn more about Marathon Petroleum’s 22-day stock price forecast range based on its current implied volatility for the period ending March 30, 2018, move on to the next article.

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