What Marathon Petroleum’s Moving Averages Indicate

In this part, we’ll look at Marathon Petroleum’s (MPC) moving averages trend in the current quarter. Before that, let’s see briefly how Marathon Petroleum’s moving averages have trended in 2018.

In the first quarter, Marathon Petroleum’s 50-day moving average (or DMA) stayed above its 200 DMA. In the quarter, MPC stock rose on better-than-expected fourth-quarter earnings. However, in the second quarter, Marathon Petroleum’s stock fell after the company announced the acquisition of Andeavor. Nevertheless, in the next quarter, Marathon Petroleum stock and its 50 DMA rose, as the acquisition progressed as expected.

Marathon Petroleum stock has fallen by 26% in Q4 2018. This was led by weaker third-quarter numbers and other factors that we discussed in the previous part. This impacted its 50 DMA, which has fallen by 13% in the quarter. Marathon Petroleum’s 50 DMA has broken below its 200 DMA in the quarter. Marathon Petroleum’s 50 DMA, which stood 9% above its 200 DMA on October 1, now stands 6% below its 200 DMA. Usually, when a shorter-term DMA breaks below a longer-term DMA, it is considered as a technically bearish sign.

Going forward, as the integration of Andeavor progresses, the company is expected to see a rise in earnings and cash flows, which could positively affect Marathon Petroleum’s stock and its 50 DMA.

Marathon Petroleum’s peers Phillips 66 (PSX), HollyFrontier (HFC), and Delek US Holdings’s (DK) 50 DMAs stand at 7%, 2%, and 15% below their 200 DMAs, respectively.