CVX Chevron Analysis March 2016 (W,M,Q,Y)
Created on Monday, 21 March 2016 04:18
Written by Austin Galt
Chevron Corp (CVX) provides administrative, financial, management and technology support to the United States and international subsidiaries that engage in fully integrated petroleum operations, chemical operations, mining activities, power generation and energy servies. It is listed on the New York Stock Exchange (NYSE) with a market capitalisation of around $180billion. Price last traded at $97.69.
Let’s take a top approach to the analysis beginning with the yearly chart.
CVX YEARLY CHART
We can see a big uptrend that remains unbroken after more than 30 years. This is evidenced by the pattern of higher highs and higher lows.
The PSAR indicator turned bearish after price broke support denoted by the dots last year so caution does need to be heeded. One scenario is price now trades back up to test the dots which are now on the upside and represent resistance. This may hold price and see a long period of accumulation and distribution take place before the next major move begins.
The Bollinger Bands show the middle band providing support and I favour a move back up to the upper band.
I have added Fibonacci retracement levels of the whole bull market and the low last year at $69.58 was right at support from the 50% level which keeps the overall bull trend in decent shape.
The RSI shows a triple bearish divergence at the all time high and this led to a significant decline. That may well be it.
The MACD indicator is now bearish so once again caution needs to be heeded.
CVX QUARTERLY CHART
The Bollinger Bands show the 2015 low traded well below the lower band which is a common setup at solid lows.
I have drawn a Fibonacci Fan from the 2003 low to 2008 high. This shows the 2008 low dipping marginally below the 61.8% angle before price rallied and generally traded higher within the 38.2% and 50% angles with the final 2014 high right around resistance from the 38.2% angle. A big downtrend ensued which looks to have been held by support from the 76.4% angle. Price is now back up near the 61.8% angle and I favour some resistance coming in now and leading to a small correction.
The RSI has moved out of oversold territory but is still weak being below the 50 level.
The MACD indicator is bearish although the averages appear to be curling back up so that offers some hope for the bulls.
CVX MONTHLY CHART
The PSAR indicator is now bullish after this month’s sterling run higher.
The Bollinger Bands show price is back at the middle band although I favour price to do some more work around this band and perhaps even head back to the lower band to put in a higher low.
I have added Fibonacci retracement levels of the move up from 2008 low to 2014 high and the recent low clipped the 76.4% level so a deep retracement. That should be it if a new bull trend is commencing.
I have drawn a Fibonacci Fan from the 2008 low to 2014 high and the low was bang on support from the 88.6% angle. Nice.
The RSI is trending up and looking strong while the MACD indicator has just made a bullish crossover.
Let’s wrap things up with the weekly chart.
CVX WEEKLY CHART
The Bollinger bands show some toing and froing between the lower and upper bands which is consistent with trend changes. I favour a move back down to the lower band before the uptrend really gets going. Let’s see.
I have added Fibonacci retracement levels for the move up from low to first high. The correction after that clipped the 76.4% level so a deep retracement which is so often seen on the first correction in a new bull market. I suspect the next higher low will clip the 61.8% level which stands at $80.68.
The bearish Fibonacci Fan shows the downtrend generally taking place between the 76.4% and 88.6% angles. Price has now broken above the resistance from the 88.6% angle and I favour one last move down to test this angle which now represents support.
The bullish Fibonacci Fan shows the first higher low at support from the 88.6% angle and I suspect one last test of this angle is still to come.
The RSI has made a new high which is a bullish development while the MACD indicator is currently bullish.
Summing up, once another higher low is in place I expect a solid move higher to occur which may well end up at new all time highs.
Disclosure – I have no financial interest in CVX.