The oil market continues its slide with inventories continuing to help maintain lower prices. The continued weakness in oil and higher interest rate forecasts have investors pulling money out of the large cap, higher dividend yielding oil stocks. Today’s three big stock charts look at shares of Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX) and BP plc (ADR) (NYSE:BP) as all three are challenging technical support that may result in more dramatic declines.
Exxon Mobil Corporation (XOM)
Exxon mobile shares are trading back at the bottom of their recent range and pressuring what may be the last line of support for the stock before setting on another decline to a target of $75.
- XOM shares bounced off of the $80-mark today. This has been the low end of the range that dates to the beginning of this year. A move through the round-numbered support will cause traders that have been relying on this range to begin selling.
- Exxon stock was recently rejected at $82.15, which is the exact price where its 10- and 20-month moving averages are converging. This is forming hard resistance and a bearish signal for long-term traders.
- Finally, the 50-day moving average for XOM shares is starting to transition into an intermediate-term bearish signal as it rolls over at $81.57. This will add additional technical pressure to the stock.
Chevron Corporation (CVX)
Like XOM, Chevron is suffering from the detrimental oil price trend, which has put the stock into a situation where it faces either a short-term buying opportunity or the beginning of another 10% decline based on its performance over the next few days.
- CVX shares are pressing hard against the $103-price-level. This has been chart support for the last three months. We’ve been seeing increases in buying volume on previous bounces, but sellers appear more in charge of the tape this moment.
- A break below $102 will take Chevron shares below their lower Bollinger Band, quickly increasing volatility selling and targeting a fast move lower.
- CVX stock’s 20-month moving average sits at $99.84. This will be a dramatic support level that the stock must hold to avoid slipping into a long-term bear market trend. Such a break would target technical prices of $90.
BP plc (ADR) (BP)
Shares of BP have just spent the last two weeks breaking through a bevy of technical trendlines.
The move has chart watchers pushing the sell button and threatening to take this relative strength leader down the same path of other oil stocks.
- Within the last two weeks, BP shares have broken through their 50-, 100- and 200-day moving averages, all of which had consolidated around the $35-price-level. The break now has all three transitioning into potentially bearish roll overs.
- The stock appears to be initiating a new trend of lower highs and lower lows, which would be continued with a break below $34.
- BP shares are currently making a break back below the 10-month moving average. This confirms the longer-term trend forecasts that they are turning bearish and it threatens an increase in selling volume as traders move out of the stock for more favorable performers.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
