In his first Executive Decision segment of "Mad Money" Wednesday, Jim Cramer spoke with Mike Wirth, chairman and CEO of Chevron Corp. (CVX) , the integrated oil giant.
When asked how Chevron has emerged as one of the pre-eminent oil producers, Wirth said most oil producers have been making changes in their strategies and priorities. Chevron has remained constant, he said.
Wirth said Chevron embraces a low-carbon future. The energy industry is always in transition, he said, from wood to coal to oil and gas, to nuclear and now to solar, wind, hydrogen and beyond.
Let's check and see if the charts are in transition.
In this daily bar chart of CVX, below, we can see that prices made a huge decline in the first quarter of 2020. Prices made a low in the middle of March, but the rebound fizzled in early June. Prices retraced their gains into a late October low. CVX gapped to the upside in November but a strong uptrend has not materialized yet. Prices are above the bottoming 200-day moving average line and above the rising 50-day average. The trading volume was very heavy in March as some investors and traders liquidated long positions. We can see a pickup in turnover from September but it has not produced a sustained rally.
The On-Balance-Volume (OBV) line made a low in March and another low in late October followed by only a slight recovery. CVX lacks aggressive buyers. The trend-following Moving Average Convergence Divergence (MACD) oscillator finally crossed above the zero line in November but has weakened again in December.
In this weekly bar chart of CVX, below, we can see a mixed picture. Prices have finally moved above the 40-week moving average line, which is now bottoming. The weekly OBV line made a low in March and a higher low in late October, but it has yet to make a move over its May peak. The MACD oscillator crossed to a cover shorts buy signal in November but has yet to cross the zero line. More strength is needed to be displayed.
In this daily Point and Figure chart of CVX, below, we can see an upside price target of $106. A decline to $86.45 could weaken the picture.
We take a longer-term view of CVX in the weekly Point and Figure chart. Here the software is projecting the $157 area as a potential price objective.
Bottom line strategy: CVX is probably going to see more sideways price action and more base building before we see a breakout over the June high. A close at $105 or higher will be convincing. Wait for it.