Texas-based Concho Resources Inc. (CXO) was upgraded today to a "Buy" by TheStreet's Quant Ratings service. I became curious to see if the charts and indicators gave me a similar conclusion.
In this daily bar chart of CXO, below, we can see that prices started to move in an uptrend from August. In September prices closed above the rising 50-day moving average line and the still declining 200-day line.
Early this month CXO closed below the rising 50-day average but it has since rallied back above it. The now rising 200-day line was nearly tested earlier this month.
The On-Balance-Volume (OBV) line moved lower this month but it still has a positive picture overall. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line but close to a cover shorts buy signal.
In this weekly bar chart of CXO, below, we can see that prices have broken out over the highs of 2016/2017. Three weeks ago prices pulled back and retested the breakout but they appear to be moving higher again. The weekly OBV line has been stalled or flat in recent months and it would be encouraging if it moved up to a new high in the near future.
The MACD oscillator crossed to a take profits sell signal at the beginning of the month but the two moving averages that make up this indicator are close together and we could the signal flip back to a buy.
In this Point and Figure chart of CXO, below, we can see a number of chart points. Prices briefly broke the $136.63 low but came back strong. A breakout to $163.43 would be a new high for the move up and open the way to a possible $189.77 price target.
Bottom line: A quantitative upgrade to Buy with positive looking charts should be a winning combination. Traders should look to buy strength risking a close below $140.
