Chevron Misses on Earnings, but stocks Stabilize

Chevron Corporation (CVX) missed earnings per share (EPS) estimates when it reported results for the 31 July, but the stock stabilized after a decrease in the open. Chevron shares traded as low as $81.51 in response to the report, and then rebounded to $88.43 on Aug. 5. The oil giant has remained below its quarterly pivot at $88.84.

Chevron stock closed last week at $86.80, down 28% year to date and in a bear market territory 29.3% below its Jan. 3 high of $122.72. The stock is also in the bull market territory to 68.2% above its March 19 low of $51.60.

NYMEX crude oil futures are down 33.9% in 2020. The forward contract to the value of the annual level of $26.31, with its semiannual risky level at $58.11. Chevron is a component of the Dow Jones Industrial average, and with a dividend yield of 5.9%, it is one of the Dogs of the Dow in 2020.

The daily chart for Chevron

Refinitiv XENITH

The daily chart for Chevron indicates that the stock has been under a death cross since Oct. 7, 2019. This happened when the 50-day simple moving average fell below the 200-day simple moving average. It is a sell signal, because it indicates that lower prices will follow.

Chevron stock has been below these two moving averages since Jan. 8. At the same time, the oil giant’s stock has broken below its semi-pivot at $118.69. These sell signals led to the March 19 low of $51.60.

The V at the bottom of this bass had the stock up to its 50-day simple moving average, the 9 April. The high of $103.59 set on June 8, has been shy of the 200-day simple moving average, then at $105.41.

The quarterly pivot at $88.84 has been a magnet since the 1st of July. The 50-day and 200-day simple moving averages are now at $90.11 and $99.17. Chevron weekly and monthly value levels are $74.35 and $68.26.

The weekly chart for Chevron

Refinitiv XENITH

The weekly chart for Chevron is negative with the stock below its five-week modified moving average of $87.77. It is also below its 200-week simple moving average, or the return to the average, to $112.78. The 12 x 3 x 3 weekly slow stochastic reading has decreased to 30.72 last week, down from 94.22 on 31 July.

Trading strategy: Buy Chevron stock on the weakness of its weekly and monthly value levels at $74.25 and $68.26. Reduce the holdings on the strength of its 200-day simple moving average at $99.17. The quarterly pivot remains of 88.84.

How to use my value levels and risky levels: The share price closing price on Dec. 31, 2019, has been an entry to my proprietary analytics. Half-yearly and annual, the levels are still on the charts. Each level uses the past nine closes in these time horizons.

The third quarter of 2020 the level has been determined based on the 30 June close, and the level in the month of August has been established according to the July 31 close. New weekly levels are calculated following the end of each week, while new quarterly levels occur at the end of each quarter. Half-yearly levels are updated at mid-year, the levels are set throughout the year.

My theory is that nine years of volatility between the farm are to assume all possible bullish or bearish event for the stock are taken into account. To capture the volatility of stock prices, investors should purchase shares of the weakness of a plan, the value and reduce the holdings of the strength to a risky level. A pivot is a level value of the risk level that was violated in its time horizon. Hubs act as magnets that have a high likelihood to be re-tested prior to their time horizon expires.

How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings has been based on the backtesting of many methods of reading the stock prices of the momentum with the objective of finding the combination that resulted in the least number of false signals. I’ve been following the stock market crash of 1987, so I was happy with the results of more than 30 years.

The stochastic reading covers the duration of 12 weeks, high, low, and close for the stock. There is a row of calculation of the difference between the highest and the lowest compared to the farm. These levels are modified for a fast reading and slow reading, and I found that the slow playback will work best.

The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered as overbought and readings below 20.00 regarded as oversold. A reading above 90.00 is considered to be a “swell parabolic bubble” of the training, which is usually followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered to be “too cheap to ignore,” which is usually followed by a gain of 10% to 20% over the next three to five months.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.


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