After a Sharp Sell-Off, Chevron Is Setting Its Sights Higher Again

[Trading With Larry Benedict]( After a Sharp Sell-Off, Chevron Is Setting Its Sights Higher Again By Larry Benedict, editor, Trading With Larry Benedict Coming into October last year, Chevron (CVX) was stuck in a sideways pattern. OPEC production cuts and geopolitical unrest failed to ignite the U.S.’s second-largest oil and gas stock for over a year. Matters only got worse when CVX sold off into its disappointing Q3 earnings announcement in October. It lost 17% in less than a month. After a period of consolidation, CVX tried to rally into the end of last year. But that move petered out. Now CVX is trying to rally again. So let’s check where it’s heading from here… Falling Through Support The left-hand side of the chart below shows the tail-end of CVX’s sideways pattern. That finished in October. Throughout this period, the 50-day Moving Average (MA, blue line) meandered sideways. The 10-day MA crisscrossed it multiple times: Chevron (CVX) Source: e-Signal [(Click here to expand image)]( As is common with a rangebound market, momentum also fluctuated. The Relative Strength Index (RSI) flipped constantly between its upper and lower range. But there was a dramatic change in early October. CVX made a lower high on October 19 (‘A’ to ‘B’). But then it went into freefall… The 10-day MA crossed steeply below the 50-day MA and kept accelerating lower. The RSI fell sharply into its lower band. We [checked in]( on CVX back in November (red arrow). At that time, the chart showed us that this severe selling had put the RSI into oversold territory. It hinted that CVX could be setting itself up for a bounce. The RSI was steadily trending higher (showing increasing momentum) while CVX was tracking sideways. A converging pattern like this often sets up a reversal. CVX did eventually rally in December. The RSI broke back up through resistance. And the 10-day MA bullishly crossed above the 50-day MA. But that rally soon fizzled out… Take another look: Chevron (CVX) Source: e-Signal [(Click here to expand image)]( CVX drifted lower. And the RSI slipped back through support. Then, after bottoming out in January, CVX rallied again, making a higher high and higher low. The 10-day MA crossed back above the 50-day MA. The RSI gained traction back in the upper half of its band. And after briefly dipping below support earlier this month, the RSI is again trending higher (orange line). So what am I looking for around here? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. A Developing Pattern As CVX’s rally develops further, I’ll be watching several technical signals… For a start, we’ll want to see the 10-day MA stay above the 50-day MA with both trending higher. And with the RSI back in its upper range, we’ll need this positive momentum to remain. I’ll also look at a pattern developing with the MACD. As you can see, the blue MACD line recently bounced off the zero (0.00) line. It crossed above the orange Signal line in what is typically a bullish move. Since then, though, the two lines have started to converge… For CVX to test the $160 level, I’ll be looking for the MACD line to start accelerating above the Signal line from here. Regards, Larry Benedict Editor, Trading With Larry Benedict [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](