EOG Resources Inc. (EOG) has not been on our radar since early August , when we said, "EOG may hold its June lows but the recent rapid selloff suggests the low could break. Whether EOG declines to its Point and Figure target is not important. What matters now is that EOG probably will need a long period of new base building."
Five months later we come away with a much different view of EOG. Let's check the latest charts and indicators.
In this daily bar chart, below, we can see that EOG did break its June low and finally stopped declining at the end of August. Prices shot up quickly in September and then consolidated in October before resuming gains in November. Prices have broken above their 2016 highs and look to be in strong shape for further gains. EOG is above the rising 50-day moving average line and the slower-to-react 200-day line started to rise in December. The 50-day line crossed above the 200-day line in early November signaling a bullish golden cross.
The daily On-Balance-Volume (OBV) line has been rising since late August signaling more aggressive buying and confirming the advance. The trend-following Moving Average Convergence Divergence (MACD) oscillator is in a bullish mode well above the zero line.
In this weekly bar chart of EOG, below, we can see how prices have broken above the 2016 peak. EOG is above the rising 40-week moving average line. The weekly OBV line is rising and tells us that participants have been strong buyers. The weekly MACD is bullish and moved above the zero line in October.
In this Point and Figure chart of EOG, below, we can see a breakout at $108.68 and a longer-term price target of $130.48.
Bottom line: EOG is extended on the upside so traders looking to go long should wait for a pullback or a period of sideways price action before probing the long side. I would risk a close below $106.