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The Forecast for Chevron Stock through the End of the Quarter

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Sep. 6 2018, Updated 7:33 a.m. ET

Forecast price range for Chevron stock for 24-day period ending September 28

In this part of the series, we’ll estimate Chevron’s (CVX) stock price estimate based on its current implied volatility. Implied volatility in Chevron (CVX) has fallen 4.8 percentage points since July 2 to the current level of 17.1%. During the same period, Chevron stock has fallen 4.3%.

Considering CVX’s implied volatility of 17.1% and assuming a normal distribution of prices (bell curve model) and a standard deviation of one (with a probability of 68.2%), Chevron stock could close between $124.10 and $113.70 in the next 24 days ending September 28. The stock currently trades at $118.90 per share.

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Implied volatility in peers

Implied volatility in Suncor Energy (SU) has fallen 4.8 percentage points from July 2 to the current level of 21.4%. However, implied volatilities in PetroChina (PTR) and Eni (E) have risen 2.4 percentage points and 2.3 percentage points, respectively, in the same period. Currently, PTR and E have implied volatilities of 29.2% and 20.5%, respectively. If we review stock prices in the same period, SU’s and PTR’s stock prices have fallen 0.8% and 2.3%, respectively. But Eni stock has risen 2.1% since July 2.

Implied volatilities in the SPDR Dow Jones Industrial Average ETF (DIA) and the SPDR S&P 500 ETF (SPY), which closely resemble the market indexes, the Dow Jones Industrial Average and the S&P 500 Index, respectively, have also fallen.

Implied volatilities in DIA and SPY have fallen 3.1 percentage points and 1.8 percentage points, respectively, from July 2 to the current level of 10.4% and 8.8%, respectively. However, in the same period, DIA’s and SPY’s values have risen 7% and 6.6%, respectively.

In the next part, we’ll review Chevron’s dividend yield trend.

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