Integrated energy stocks in the third quarter
In the third quarter of 2018, integrated energy stocks ExxonMobil (XOM), Chevron (CVX), Royal Dutch Shell (RDS.A), and BP (BP) had mixed performances, as we saw in the previous part of this series. These stocks were also impacted by their second-quarter earnings. XOM, CVX, and Shell missed Wall Street analysts’ earnings estimate, while BP surpassed it.
Moving average trends in the third quarter
Integrated energy stocks’ moving averages have also had mixed performances in the third quarter. CVX’s and Shell’s 50 DMAs (day moving averages) broke below their 200 DMAs, while XOM’s 50 DMA crossed over its 200 DMA. The wide gap between BP’s 50 DMA and 200 DMA has narrowed.
Chevron’s 50 DMA, which was 4.3% above its 200 DMA in the third quarter, is now 0.9% below its 200 DMA due to the decline in CVX’s 50 DMA. Usually, when a short-term DMA breaks below a long-term DMA, it’s considered a technically bearish sign. Like CVX, Shell’s 50 DMA broke below its 200 DMA and currently stands 1.7% below its 200 DMA.
BP’s 50 DMA has also declined in the quarter, leading to the contraction of the gap between both DMAs. BP’s 50 DMA, which was 9.6% above its 200 DMA on July 2, was 1.3% above its 200 DMA on September 28.
XOM’s 50 DMA crossed over its 200 DMA in the quarter. Its 50 DMA is currently 1.1% above its 200 DMA.
If oil prices fall or the markets get weaker from the current levels, XOM and BP stocks and their 50 DMAs could fall. That could lead to their 50 DMAs easily breaking below their 200 DMAs, like CVX and Shell.
Next, let’s look at the price forecasts for XOM, CVX, RDS.A, and BP for the third quarter of 2018.