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ExxonMobil and Chevron: Do Moving Averages Show a Breakout?

Maitali Ramkumar - Author

Sep. 26 2019, Published 1:30 p.m. ET

Leading energy stocks like ExxonMobil (XOM) and Chevron (CVX) are facing bleak business conditions. Oil prices have been weaker in the third quarter. Although the attack on Saudi Arabia raised oil prices, it partially shed the gains. Currently, WTI trades 3.2% lower than the beginning of the quarter. Weaker oil prices could impact energy companies’ realizations and earnings in the third quarter. We’ll analyze the stocks’ performances and moving averages to determine the trend.

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ExxonMobil and Chevron’s stock performance

Energy stocks have fallen in the third quarter. Dull second-quarter earnings, weak oil prices, volatile equity markets, and rising geopolitical risks impacted the stocks. So far in the third quarter, ExxonMobil and Chevron stocks have fallen 6.9% and 0.7%. Meanwhile, Royal Dutch Shell (RDS.A) and BP (BP) stocks have fallen 11.1% and 8.5% in the quarter.

Impact on moving averages

Energy stocks’ performance impacted their 50 DMAs (day moving averages) in the third quarter. While Chevron stock crossed over its 50 DMA, ExxonMobil stock broke below its 50 DMA. Usually, when a stock crosses over its 50 DMA, it’s considered to be a positive sign and vice versa.

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ExxonMobil stock broke below its 50 DMA

ExxonMobil stock, which was 2.3% above its 50 DMA in mid-September, holds 0.1% below its 50 DMA. So, ExxonMobil stock broke below its 50 DMA. Since mid-September, the stock fell 1.8%, more than a 1.0% fall in its 50 DMA, which caused the breakdown.

ExxonMobil’s 50 DMA trades 4.9% below its 200 DMA. The gap has widened in the third quarter. At the beginning of the quarter, ExxonMobil’s 50 DMA traded 2.1% below its 200 DMA.

Also, ExxonMobil stock is trading 17.9% below its 52-week high of $86.9. ExxonMobil stock is trading 10.4% above its 52-week low of $64.7. Notably, the stock has gained around 4.6% year-to-date.

However, the current quarter hasn’t been good for the stock. ExxonMobil’s stock broke below its 50 DMA. The gap between both of ExxonMobil’s moving averages widened, which lowered the 50 DMA further into the negative territory.

Chevron stock had a crossover

Since August 23, Chevron stock has risen 4.9%, while its 50 DMA has fallen 1.3%. As a result, Chevron stock rose above its 50 DMA. The stock, which was 5.9% below its 50 DMA on August 23, is 2.1% above its 50 DMA. Also, Chevron’s 50 DMA is 1.2% above its 200 DMA.

Chevron stock is trading 3.2% below the 52-week high of $127.6. The stock also trades 23.2% above its 52-week low of 100.2. Chevron stock has returned around 13.5% year-to-date—more than ExxonMobil stock.

Although Chevron stock has fallen in the third quarter, it’s above the 50 DMA, which is a good sign.  Chevron’s 50 DMA stayed above its 200 DMA despite severe conditions in the energy industry, which is a favorable scenario.

Third-quarter recap

ExxonMobil and Chevron stock have fallen in the third quarter. ExxonMobil stock looks weak. Notably, the stock broke below its 50 DMA. ExxonMobil’s 50 DMA fell further away from its 200 DMA. However, Chevron seems strong—its stock crossed above its 50 DMA. The stock is in a positive zone with its 50 DMA holding above its 200 DMA.

Read ExxonMobil or Chevron: Which Is the Better Buy? to learn more about the investment opportunity in energy majors.


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