EOG Resources May Not Be Able to Resume Its Uptrend

 | Feb 15, 2018 | 2:33 PM EST
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EOG Resources, Inc. (EOG) broke its five-month uptrend from its August low. Prices are rebounding but could run into selling at the underside of the uptrend line. Let's see how the charts and indicators look.

In this daily bar chart of EOG, below, we can see that prices broke the flattening 50-day moving average line and briefly touched the rising 200-day line. EOG has rebounded a bit in recent days and we could see a test of the 50-day line from the underside.

The On-Balance-Volume (OBV) line peaked with prices and declined for about two weeks telling me that sellers became aggressive. The line shows a small "uptick" with prices and not a strong rise so far. The 12-day momentum study shows a sharp decline but no bullish divergence yet.

In this weekly bar chart of EOG, below, we can see that prices quickly dropped to test the rising 40-week moving average line and quickly cut through what should have been support in the $105-$100 area. The weekly OBV line shows a decline for January and the 12-momentum study show a bearish divergence from November to January -- prices made higher highs but momentum made equal highs.

In this Point and Figure chart of EOG, below, we can see an important upside breakout at $110. Prices rally to $118 and plunge to $97. A downside price target of $75 is indicated but if EOG cannot rally past $110 again, the previous breakout level, I would get nervous.

Bottom line: it would be nice to believe that all the stocks that were in uptrends in January will resume those uptrends but I doubt that will be the case. Time to separate the men from the boys.

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