In his Executive Decision segment of Wednesday's "Mad Money" program, host Jim Cramer spoke with Rick Muncrief, CEO of Devon Energy Corp. (DVN) .
Muncrief said Devon's merger with WPX Energy has been going very well. He said the company's new business model, which includes a variable dividend and a share buyback program, also been well-received.
Muncrief noted that in years past, oil drillers were compensated for growth, which is why you saw so much volatility. But even before the pandemic, oil producers were becoming more disciplined, offering stability and far less volatility. Those trends only accelerated after COVID.
Let's focus on the charts of DVN.
In this daily bar chart of DVN, below, we can see that prices have tripled in the past three months. DVN is trading above the rising 50-day moving average line as well as the rising 200-day line. The math-driven On-Balance-Volume (OBV) line shows a rising pattern the past year, telling us that buyers of DVN have been more aggressive than sellers. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In this weekly Japanese candlestick chart of DVN, below, we can see a strong uptrend in the past two years. Prices are trading comfortably above the rising 40-week moving average line. The rising weekly OBV line confirms and supports the price gains. The MACD oscillator is bullish.
In this daily Point and Figure chart of DVN, below, we can see a potential upside price target in the $81 area.
In this second Point and Figure chart of DVN, below, we used weekly price data and a five-box reversal filter. Here a $111 price target is revealed.
Bottom line strategy: Traders could go long DVN at $55 or better, risking to $43 for now. Our price targets are $81, then the round number of $100 and finally $111.
