PSX’s 50-Day Moving Average Crosses Its 200-Day Moving Average



PSX’s moving averages prior to the second quarter

In the previous article, we learned that Phillips 66 (PSX) stock has surged 16% in the current quarter. Now let’s look at PSX’s moving average trend in the current quarter. Before that, let’s briefly see how PSX’s moving averages trended in the quarters prior to the second quarter.

In the third quarter of 2017, at the end of August, the refining environment strengthened as a result of Hurricane Harvey. Phillips 66’s 50-day moving average crossed over its 200-day moving average in the quarter. In the fourth quarter of 2017, PSX’s 50-day moving average surged due to an increase in Phillips 66 stock. This rise was likely led by its better third-quarter earnings, which surpassed Wall Street analysts’ consensus estimate. Tax reforms in the United States also presumably boosted the stock.

In the first quarter, weaker broader markets and a lower USGC (US Gulf Coast) WTI 3-2-1 crack in February led to a fall in Phillips 66 stock and its 50-day moving average.

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Phillips 66’s moving averages in the second quarter so far

In the second quarter, Phillips 66 published its first-quarter earnings. PSX surpassed its earnings estimates for the quarter. Better broader markets and a higher USGC WTI 3-2-1 crack, as we discussed in the previous article, also led to the rise in Phillips 66 stock. The rise in the stock led to a surge in its 50-day moving average and expanded the gap between its 50-day moving average and its 200-day moving average—a favorable sign. PSX’s 50-day moving average, which stood 5% above its 200-day moving average at the start of the second quarter on April 2, now stands 15% above its 200-day moving average.

Peers’ moving averages

Similar to PSX, Andeavor’s (ANDV), Valero Energy’s (VLO), and Marathon Petroleum’s (MPC) 50-day moving averages are trading 20%, 23%, and 15% above their 200-day moving averages, respectively.

The SPDR Dow Jones Industrial Average ETF (DIA), which closely follows the Dow Jones Industrial Average index, has a 50-day moving average that’s 2% higher than its 200-day moving average.

In the next article, we’ll estimate Phillips 66’s stock price range until the next quarter’s end based on its implied volatility.


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