We have been on top of the rally in shares of oil giant Chevron (CVX) and covered it on March 1, writing in our summary "In our December 28 review of CVX we wrote: 'Continue to hold previously recommended longs. Raise stops to $108 from $101. The $136 is our first price target followed by the $168 area which could be reached in late first quarter 2022.' CVX has passed our $136 target and we have the rest of March to reach our $168 target. Continue to hold longs and raise stops to $129 from $108. $205 is our target after $168."
Shares traded around our $168 price target on Wednesday and a sell-side analyst raised their fundamental price target to $183 from $148. So let's take another look at the charts and indicators.
In this updated daily bar chart of CVX, below, we can see that prices are up some 70% from their August/September levels. CVX is trading firmly, meaning short and shallow corrections, above the rising 50-day moving average line and the rising 200-day line.
The trading volume has been increasing since September and the On-Balance-Volume (OBV) shows a similar rise from September. The Moving Average Convergence Divergence (MACD) oscillator also turned bullish in late September and continues with a bullish alignment above the zero line.
In this weekly Japanese candlestick chart of CVX, below, we continue to see a bullish picture. Prices are in an uptrend above the rising 40-week moving average line. The latest candle shows an upper shadow but I do not expect that to be the start of a top reversal.
The weekly OBV line is very strong telling us that buyers of CVX have been more aggressive since early 2020. The MACD oscillator is also bullish.
In this long-term weekly bar chart of CVX, below, we can see that when CVX moved above $135 it broke out of a very large and long consolidation pattern going back to 2008. The height of the pattern is $75 (from $60 to $135) and when that is added to the breakout level of $135 we get a $210 price objective for starters.
In this first Point and Figure chart of CVX, below, we used daily price data. Here the software is reading the X's and O's and is projected the $167 area (reached) as the price target.
In this second Point and Figure chart of CVX, below, we also used daily data but with a five box reversal filter. Here the target is $205 and that is in line with the long-term bar chart price target mentioned above.
In this third Point and Figure chart of CVX, below, we used weekly data and a five box reversal filter. $237 is the price target here.
Bottom line strategy: The strategy is easy - continue to hold longs. Raise stops to $140 from $108. Our next price targets are $200-$205 and then the $237 area.
