The beginning of this week wasn’t so much about stocks as it was about oil. Today’s three big stock charts feature oil and energy sector names. All eyes were on West Texas Intermediate crude oil as the front-month futures contracts actually went into negative territory on Monday.
This has positive and negative potential implications. Sure, lower prices at the pump will be welcomed by most gasoline consumers. On the other hand, the U.S. energy sector will have difficulty turning a profit with petroleum prices under this much pressure.
In light of this, many traders are watching energy-sector stocks closely. Some will be bearish, while others will be keeping an eye out for bargains. Therefore, this is a great time to take a look at three big stock charts in the ailing energy sector.
Texas-based company Halliburton (NYSE:HAL) is known for providing a number of services and products within the energy market. HAL stock offers shareholders an enticing forward annual dividend yield of 9.4%. But what is the stock’s price action on the first of our big stock charts telling us now?
- As you can see, Monday’s candlestick doesn’t look bad at all. For HAL stock to close nearly flat on such a volatile day for oil is impressive. That’s a great sign because it demonstrates that the company may be able to withstand the oil-price shock.
- The line to watch closely here is the 20-day moving average, which is a short-term price action indicator. HAL stock is right on that line. Expect the buyers and sellers to wage war over that line throughout the week.
- The bulls won’t be super comfortable with the falling wedge chart pattern here. A close above the upper resistance line in the wedge would provide a real confidence booster.
Occidental Petroleum (OXY)
Oil-sector watchers are preparing for Occidental Petroleum (NYSE:OXY) to report its earnings results for 2020’s first fiscal quarter on May 5. In the meantime, let’s home in on the chart to see what might be in store for OXY stock.
- Monday’s candlestick might not look like much, but it represents a single-session decline of over 7%. Still, the short-term trend since March has been sideways, so that provides a neutral outlook.
- We can see that OXY stock is clinging to the 20-day moving average. The bulls will want to see it clear that line, followed by the 50-day moving average. The 200-day moving average is still a long way off.
- $10 is a psychologically significant level, so the bulls will definitely not want to see OXY stock break below it. Note that the stock did bounce off of $10 in March. If the bounce happened once, it just might happen again if the share price gets down there.
Within the American energy sector, Chevron (NYSE:CVX) remains a giant with few rivals. Still, Chevron’s profitability depends, to a large extent, on developments in the oil market. What’s the chart telling us about the future of CVX stock?
- Unfortunately for the bulls, Monday’s candlestick has what’s known as a “shooting star” formation. This means that the candle’s body is small, there’s hardly any lower wick, and there’s an upper wick that’s longer than the body. This is generally considered bearish.
- The bounce-back in CVX stock since March is extremely encouraging for the bulls. Over the past few trading sessions, however, the rebound seems to be fizzling out. The next several days will be crucial in determining the trajectory of the short-term trend.
- What’s positive is that the stock is above the 20-day moving average. CVX stock buyers tried to push it above the 50-day moving average on Friday and Monday. Unfortunately for them, they failed at those two attempts.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.