Sunday, August 9, 2015

Chevron (CVX): Two Month Plunge Takes Price Down to Weekly Channel Support?

Our previous post on CVX here indicated that CVX had broken support, both long-term and a short-term descending triangle pattern on a weekly chart.

As the chart below shows, CVX continued to fall and is now at an apparent long-term rising channel support line (solid green) that has not been tested since 2009.

chevron weekly chart 08/07/2015
click chart to enlarge

In addition, the upper portion of the chart shows that CVX is at/near oversold conditions, per the 20-period RSI, as it was in 2009.

In 2008-9, CVX rallied when it hit this support line (twice). Will investors again step in and lift CVX off support, or could a break in support trigger more selling?  

The future is unknown.  We will just have to wait and see.

However, if support appears to hold here, this would be an opportunity to implement a buy and protect strategy if I was interested in owning shares in CVX as an investment.

Again, this is not investment advice.  This is just an example of how a patient investor could wait and potentially buy CVX at a relatively low price (and at oversold conditions) after a steep sell-off and then use the rising channel support line as protection (i.e., a stop-loss trigger if CVX closes below it at the end of a week). Please remember, you alone are responsible for your investment decisions.

Not Investment Advice | Important Disclaimer: 
The content in this article, including the identification and discussion of any specific security (e.g., bond fund), is NOT meant to be and should NOT be construed and/or used as investment advice. This article is for general information and educational purposes only. Please read the Disclaimers  for in their entirety. The U.S. Securities and Exchange Commission website has guidance on selecting an investment adviser.

Financial Disclosure:
The author/publisher has no position in oil or CVX at the time this article was written.

Base Chart Provided Courtesy of  Analysis and Annotation by JunkBond (all rights reserved)

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