Chevron Got an Upgrade, but What Do the Charts Look Like?

We're taking another look at the oil giant after the stock receives a fundamental boost.

Chevron (CVX) was upgraded to a "buy" by a sell-side firm Monday. When we reviewed CVX on Sept. 17 we wrote that, "The price of CVX has corrected lower for six months now. We have some tentative signs that support around $95 is holding and that gives us optimism about a move to the upside. Traders could go long CVX on strength above $102.50 risking to $94."

Let's check out the charts again.

In the daily bar chart of CVX, below, we can see that the shares have rallied strongly after breaking above $102.50. Prices made a new 52-week high today. Prices are nicely above the rising 50-day and the rising 200-day moving averages. We can also see a recent bullish golden cross of these two indicators.

The On-Balance-Volume (OBV) line has been strong since late September and that helps to confirm the price gains. The Moving Average Convergence Divergence (MACD) oscillator is pointed down but narrowing towards a new buy signal, I expect.

 

In the weekly Japanese candlestick chart of CVX, below, we see a positive picture. Prices are in an uptrend above the rising 40-week moving average line.

 

The weekly OBV line is strong and matches the new price high. The MACD oscillator has crossed to the upside for a new outright buy signal.

 

 

In this daily Point and Figure chart of CVX, below, we can see the upside breakout and a new price target of $136.

 

 

In this weekly Point and Figure chart of CVX, below, we see that the software has figured out a potential $159 price target.

 

 

Bottom-line strategy: It's nice when the fundamentals follow the charts -- stay long CVX from the $102.50 area. Raise stops to $101 from $94. Our price targets are $136 and then the $159 area.

 

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