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Is Southwestern Energy’s New Uptrend for Real?

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Jun. 19 2018, Updated 12:43 p.m. ET

Southwestern Energy stock

For the week ended June 15, Southwestern Energy (SWN) stock increased ~6.0% from $4.88 on June 8 to $5.16 on June 15. On June 11, SWN crossed above its 200-day moving average and consolidated above it throughout the week. Before this, SWN made three unsuccessful attempts to regain its 200-day moving average. 

If SWN holds above the critical support level of its 200-day moving average, it could be a strongly positive sign for the stock. Currently, SWN is making higher highs and higher lows on the daily chart—indicating an uptrend on the daily chart.

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On June 11, SWN moved above the critical resistance level of $4.90. In the last week of January, SWN moved below $4.90 on heavier 30-day average volume. This is the level that arrested the stock’s sell-off from September 2016 to October 2017. Interestingly, this is also the same level that provided support to SWN stock to stop its decline from June 2014 to December 2015.

On June 15, SWN’s 50-day and 200-day moving averages stood at $4.54 and $5.05, respectively, and it traded at $5.16.

Natural gas moved up

Natural gas prices were up significantly last week, rising ~5.0%. Natural gas prices increased from $2.89 per MMBtu (million British thermal units) to $3.02 per MMBtu. Currently, natural gas prices are trading above the 200-day moving average. 

On June 15, natural gas’s 50-day and 200-day moving averages stood at $2.82 and $2.88, respectively, and natural gas traded at $3.02 per MMBtu. For the week ended June 15, crude oil (USO) prices decreased from $65.74 per barrel to $65.06 per barrel, a decrease of more than 1.0%.

Despite higher natural gas (UNG) prices last week, the First Trust Natural Gas ETF (FCG) fell ~2.3%. FCG represents an index of energy stocks that derive a substantial portion of their revenues from the exploration and production of natural gas. SWN outperformed the First Trust Natural Gas ETF (FCG) last week. SWN’s peer Consol Resources (CNX) fell ~3.0% last week and underperformed FCG.

In the next part, we’ll look at SWN’s correlation coefficient with natural gas prices.

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