During the first "Executive Decision" segment of Thursday's "Mad Money" program, Jim Cramer sat down with Scott Sheffield, president and CEO of Pioneer Natural Resources Co. (PXD) . The stock has been under serious pressure the last few weeks as it has followed the price of oil lower.
Sheffield came out of retirement to help lead the charge at PXD, saying he did it for the investors and employees. Pioneer Natural Resources had to take some tough but necessary cost-cutting decisions, but that's left the company with a very strong balance sheet. "I'm very excited about the future," he said.
Pioneer Natural Resources is sitting on a very generous amount of land in the Permian Basin that has an incredibly low cost basis from 20 years ago, Sheffield said. Keeping its costs down allows the company to maximize its profitability, and that should make it attractive going forward.
In this four-year weekly chart of PXD, below, we can see a weakening picture. Prices are below the declining 40-week moving average line. There is some chart support in the $140 to $125 area, but next support looks to be in the $110-$100 area. The weekly OBV line was bullish from late 2017 to April of this year, but it may have started a new weakening trend. The weekly MACD oscillator is turning down now for a fresh sell signal on this longer time frame.
In this Point and Figure chart of PXD, below, we can see a downside price target of $129 projected. A decline to $129 or so is likely to break the March low and open the way to further declines.
Bottom line strategy: Energy prices look like they will continue to retreat, so PXD is likely to be on the defensive the next few months. A better buying opportunity lies ahead.