WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

Today’s Trading Edge: Chevron Corp shares plunge but respect 100-day SMA

Posted by WorldWideMarkets . on Jul 31, 2016 9:39:00 PM

WWM_CVX_JULY_31_2016.jpg 

On Friday, Chevron Corp. (CVX) shares initially plunged after second quarter results.  The company reported a loss of $0.78 per share compared to a profit of $0.30 a year ago, the negative print resulted from impairments and other non-cash charges totaling $2.8 billion.  On adjusted basis, the company reported a profit of $0.35 per share, a beat over the analyst consensus of $0.31.  Revenue missed with a $28.0 billion print, expectations were for a $29.8 billion result.  The California based company noted that second quarter results reflected lower oil prices and our ongoing adjustment to a lower oil price world.  The upstream business recorded impairment and other charges on certain assets where revenue from expected oil and gas production is expected to be insufficient to recover costs. The downstream business continued to perform well. On the earnings call, the company noted Q3 production will be impacted by a large number of turnarounds.  They anticipate to exit 2016 with production rate at 2.65-2.67M barrels per day. 

Shares initially traded sharply lower to $99.25 but respected the 100-day SMA and ended the session up 0.68% to $102.48.  Price action on the Chevron daily chart shows the downward correction may resume if price is unable to recapture the 50-day SMA, which currently trades around the $102.91 level.  If oil prices resume their bearish trend, we could see Chevron shares come under pressure.  Major support will come from the 200-day SMA, which trades at the $94.31 level.      

The Trade: Sell CVX at $102.75, with a stop loss at $103.75 and a take profit at $98.75.  The Risk/Reward Ratio is 1:4

Topics: Commodity Trading, $OIL, US Stocks, US equities

 

Tools & Educational Resources

Forex 101LEARN MORE >>
Learn the basics of Forex and how to practice trading the markets.

GlossaryLEARN MORE >>
Confused by the language? Click here and search for key trading terms.

FAQ CenterLEARN MORE >>
Browse our frequently asked questions and find your answers right away.

VideosLEARN MORE >>
Access to the educational lessons, webinars and platform walkthroughs.

READY TO TRY THE MARKETS?

Get started with a FREE $10,000 Demo Account and experience the Forex Market RISK FREE!