2 Energy Stocks With Promise: A Technical Look

Let's head to the oil patch for a look at Chevron and Pioneer Natural Resources.

The positive news about Pfizer's (PFE) Covid-19 vaccine sent the markets soaring Morning. However, Jim Cramer told viewers of his Mad Money program that doesn't mean it's time to sell all of your stay-at-home stocks quite yet.

By Pfizer's estimates, the company will only have enough doses to treat 23 million people globally this year, and it will only be able to vaccinate 600 million throughout all of next year. That means it's still not too late to sell the office and retail REITs and the banks into any strength.

Cramer said the oil stocks will also continue to struggle, which is why he's only recommending Chevron (CVX) and Pioneer Natural Resources (PXD) in the oil patch. Let's check out a couple charts for each of these names. 

Chevron

In the daily bar chart of CVX, below, we can see that the shares gapped above the declining 50-day moving average line Monday but stopped short of the underside of the declining 200-day moving average line. Prices closed in the lower part of Monday's high/low range so we know that buyers were not entirely convinced of the move up.

The trading volume has been heavier since the middle of October and the On-Balance-Volume (OBV) line shows strength since late October and that is encouraging. The Moving Average Convergence Divergence (MACD) oscillator is moving up toward the zero line and hopefully an outright long signal. 

 

 

In this daily Point and Figure chart of CVX, below, we can see two positive developments. Prices broke a downtrend from July (look for the "7" on the chart) and now we can see a potential upside price target of $111. 

 

 

Pioneer Natural Resources

In the daily bar chart of PXD, below, we can see some interesting and positive developments. Prices gapped up and rallied Monday to test the declining 50-day moving average line. The 200-day moving average line is above the 50-day line and also shows a negative slope.

 

The trading volume shows a significant expansion from the middle of October suggesting that someone decided to vote with their feet. The OBV line started to show some bottoming action and the MACD oscillator started to improve. 

 

 

In this daily Point and Figure chart of PXD, below, we can see a short-term price breakout at $86.45 and a potential price target of $115. 

 

 

Bottom-Line Strategy

Both CVX and PXD show an increase in trading volume since the middle of October and both may have made a low in October. Both Point and Figure charts show decent upside potential but I want to see a gap filling retest and maybe some more basing action before buying. CVX and PXD are on my radar.

 

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