Chevron has been on a downtrend since late 2014 before it showed signs of bottoming out recently. After all, oil prices have been tumbling also around the same time, weighing on the company’s profitability and prospects.
Price formed a double bottom pattern on the weekly time frame, signaling that the selloff might soon turn. The stock is still testing the neckline of the formation around $97 and a break above this resistance level could confirm that an uptrend is in the cards.
So far crude oil has drawn support on reports of discussions among oil producing nations to trim or cap production in order to boost prices. Although no actual deal has been made yet and several nations are still hesitant to commit to anything, the mere fact that OPEC leaders have shown willingness to cooperate is enough to pare the commodity’s losses.
For now, the 100 SMA is still below the 200 SMA so an uptrend isn’t guaranteed yet. RSI is on the move up and is approaching the overbought zone so profit-taking might take place around these resistance levels. Also stochastic is heading north and indicating that bulls are in control but is also nearing overbought territory.
Rumors that the March 20 meeting among oil producers has put a bit of a dent on prices but commodity traders and Chevron investors are hopeful that it will be rescheduled for next month. This appears to be enough to keep prices supported for now.
In addition, the pickup in risk appetite spurred by the Fed’s decision to downplay any tightening biases for the year has allowed equities to advance. Investors and businesses can count on a longer period of low borrowing costs, which also supports consumer spending activity.
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