A Technical Take On Chevron And Exxon

Two of the largest oil companies in the United States are Chevron Corporation (Ticker Symbol: CVX) and Exxon Mobil Corporation (Ticker Symbol: XOM).  Below is a technical take on Chevron and Exxon’s historical stock performance over the past decade including how Exxon has traded together with crude oil and a snapshot of Wall Street’s average price targets for each company.

The image above is a long-term weekly chart of Chevron’s stock over the past decade. The stock started off recovering from the great recession finding some price support just under the $60.00 price level. After the Federal Reserve introduced quantitative easing, the stock began to find some footing and move higher. Chevron found some dynamic price support at its 100-week moving average multiple times between 2012 and 2014.  The stock went on to trade to an all-time high of $135.10 on July 21st, 2014.

Unfortunately for shareholders, the stock took a turn for the worse led by falling crude oil prices.  The stock continued to sell off, eventually putting in the most oversold condition in the stocks Relative Strength Index in over six years and finding price support right around the $70.00 price level. Chevron traded higher over the next two years almost making a new all-time high but failed to break above the $135 level. Currently, the stock is trading right in between both its 100- and 200-week moving averages.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of 34 analysts offering 12-month price targets, the average price target for Chevron’s stock is $142.67. According to that number, the stock is priced at a slight discount relative to Wall Street’s analysts and could be considered undervalued around current levels near $112.29.

The image above is a long-term weekly chart of Exxon Mobil’s stock over the past decade. The stock started off recovering from the great recession finding some price support just above the $55.00 price level. Along with most of the stock in the market (after the Federal Reserve introduced quantitative easing), the stock began to find some support and trade higher.  The stock spent the next four years trading in an uptrend and ticking to an all-time high of $104.76 on July 28th, 2014. Exxon spent the next two years giving back the majority of its previous rally.

The stock tried to put together a rally in the first two quarters of 2016, but the stock was unable to get solid catalysts to give it legs to go higher.  Exxon found some dynamic resistance just above its 200-week moving averages while it has continued to make lower highs for the next three years.  Currently, the stock is trading below both its 100- and 200-day moving averages.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of six analysts offering 12-month price targets, the average price target for Exxon Mobil’s stock is $80.60. According to that number, the stock is priced at a discount relative to Wall Street’s analysts and could be considered undervalued around current levels near $67.15.

The image above is a weekly chart that has Exxon’s stock with the price of WTI crude oil overlayed on it over the past 30 years. The stock has had relatively high levels of correlation with WTI crude oil over this period of time. The highlighted boxed areas represent periods of time when they were not trading in tandem and they lost their correlation or it wasn’t as great as the prior periods. Based on the chart above, it seems as if Exxon and WTI crude oil have had a higher correlation over the past 10 years than prior to the year 2008.

Investors in the energy sector should look to Chevron and Exxon Mobil’s next earnings release on November 3rd for fresh news within the sector.