Jim Cramer answered a viewer's question about Marathon Oil (MRO) during the "Lightning Round" Monday night on Mad Money. "The oil stocks are in a bear market," said Cramer. Let's check the charts and indicators this morning.
In the daily bar chart of MRO, below, we can see a number of bearish signals the past month. Prices broke out to the upside in September, breaking away from a five-month consolidation pattern. Prices quickly reversed directions in early October and fell down below the flat 50-day moving average line and more recently below the cresting 200-day moving average line. The slope of the 50-day line has begun to turn negative.
The daily On-Balance-Volume (OBV) line shows a decline this month telling us of a shift from aggressive buying to aggressive selling. The trend-following Moving Average Convergence Divergence (MACD) oscillator moved below the zero line this month for an outright sell signal.
In the weekly bar chart of MRO, below, we can see that prices are in their second week below the flattening 40-week moving average line. The weekly OBV line has been stalled for several months and did not break out to a new high when prices briefly broke out to new highs.
The weekly MACD oscillator is pointed down toward the zero line.
In this Point and Figure chart of MRO, below, we can see a break of support and a downside price target of $16.62 being projected.
Bottom-line strategy: With a number of sell signals on our charts of MRO we would avoid the long side.
