In the "Power Rankings" segment on last night's "Mad Money" program, our own Jim Cramer dove into the energy sector to see which stocks are worth buying now. At the top of the list? Marathon Petroleum (MPC) which is now the largest oil refiner in the U.S.
The refining business has been very strong but this stock still trades at just 10 times earnings, according to Cramer. Okay, but what about the charts and indicators?
In this daily bar chart of MPC, below, we can see that MPC has been in an uptrend the past 12 months - higher lows and higher highs. Prices are above the rising 200-day moving average line and there was a successful test of the line in late June and early July.
MPC is currently below the flat 50-day moving average line. The daily On-Balance-Volume (OBV) line showed strength until late August but some weakness since then.
The Moving Average Convergence Divergence (MACD) oscillator has been declining from early August and is about to cross the zero line for an outright sell signal.
In this weekly bar chart of MPC, below, we can see that the rising 40-week moving average line has been a great indicator of the uptrend since late 2016.
The weekly OBV line has been weak lately and is a bearish divergence when compared to price.
The MACD oscillator crossed to a bearish signal in September but is still above the zero line.
In this Point and Figure chart of MPC, below, we can see the uptrend since 2016 and a downside price target of $72. A decline to $72 would break the rising 40-week moving average line, should it happen.
Bottom line strategy: MPC is trading higher today and could be turning up to retest the September highs. I would want to see volume increase and the OBV turn up too. If that happens we could set our sights on the big round number of $100. Risk below $75.
