Pioneer Natural Resources (PXD) gapped higher Monday morning on media reports that Exxon Mobil (XOM) was studying the possible acquisition of PXD, an independent oil and natural gas exploration and production company. Let's check out the charts and indicators of PXD and see if there could be more upside to come.
In this daily bar chart of PXD, below, I can see that the price of PXD has rallied smartly since the middle of March. Prices are above the 50-day moving average line and getting close to the underside of the declining 200-day moving average line. Trading volume has been heavier than "average" since the middle of February.
The On-Balance-Volume (OBV) line has been weak until the middle of March and shows only limited improvement. The trend-following Moving Average Convergence Divergence (MACD) looks like it could soon cross above the zero line for an outright buy signal.
In this weekly Japanese candlestick chart of PXD, below, I can see some promising developments. Prices are still in a downward trend and trade below the negatively sloped 40-week moving average line. In March I can see a bottom reversal pattern (harami) with confirmation. A bottom reversal can mean a rally to the upside or a turn from down to sideways. Candles also do not provide price targets.
The weekly OBV line has been "softish" the past 12 months but shows a slight "uptick" in March. We'll have to see if it continues. The MACD oscillator is below the zero line but narrowing towards a potential cover shorts buy signal.
In this daily Point and Figure chart of PXD, below, I can see Monday's price action with no price gap. Here the software suggests that prices could reach $225. Just about there.
In this weekly Point and Figure chart of PXD, below, I can see a potential upside price target in the $317 area.
Bottom line strategy: I have no special knowledge of what Exxon Mobil or any other energy company may do. I have no special knowledge of what PXD may be worth if it was "out for the bid". That being said, I would look for higher prices for PXD in the near future.
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