Oil Is Looking for a Reason to Bounce

[Trading With Larry Benedict]( Oil Is Looking for a Reason to Bounce By Larry Benedict, editor, Trading With Larry Benedict Chevron (CVX) is the second-largest U.S. oil and gas producer. Yet for the last year or so, it has meandered in a sideways pattern. Despite OPEC production cuts, geopolitical unrest, and mixed global economic data, CVX went into October trading around where it had been in December last year. Then a sharp sell-off in mid-October and disappointing Q3 earnings saw CVX lose 17% in less than a month. That put it into oversold territory. So let’s check out the chart to find potential trades… Recommended Link [WWIII: 260 Million Americans in Imminent Danger]( [image]( According to the founder of the world’s largest hedge fund, Ray Dalio, we’re at the brink of “a brutal World War III.” But former Vice President of a major U.S. investment bank, Teeka Tiwari is warning that the biggest risk to America is NOT a nuclear attack. [Click here to see what the REAL risk is because it could impact 260 million Americans…]( starting as soon as this month. [PREPARE NOW.]( -- Tradeable Moves The 50-day moving average (MA, blue line) in the chart below shows how lackluster CVX has been this last year. CVX had a slow rally into the end of 2022. We then saw a gentle fall, followed by a gradual rise since the middle of this year. Chevron (CVX) [Image] Source: eSignal But there have been some tradeable moves within this broad sideways pattern. An example of those moves is CVX’s sell-off from January to March followed by its bounce from there into April. These moves coincided with a clear reversal in momentum, shown by the relative strength index (RSI). But I want to concentrate on the action from July onward. CVX’s gentle rally began in July. And we saw the 10-day MA cross above the 50-day MA with both slowly trending higher. The RSI gradually tracked higher too. It eventually gained a firm hold in the upper half of its range (above the green line). These bullish signs were promising. But that rally reversed as the result of a diverging pattern (left orange lines). CVX was making higher highs (upper orange line). Yet the RSI was tracking lower from near-overbought territory (lower orange line). When momentum steadily falls like that, it eventually pulls the stock price lower. And that is what we saw. Take another look: Chevron (CVX) [Image] Source: eSignal CVX did manage to counter-rally to a lower high in mid-October. But then it reversed sharply again. That move coincided with the RSI falling straight down through support. That fall developed further as CVX gapped lower after Q3 earnings. The sharp angle of the 10-day MA accelerating below the 50-day MA shows the strength of that sell-off. Now the RSI is in oversold territory, and another potential reversal pattern is developing. So what am I looking for next? 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 Converging Pattern In September, a diverging pattern between the stock price and RSI led to a change of direction. But a converging pattern can also cause a stock to reverse. And we’re seeing this develop now with the right orange lines. When the RSI steadily climbs out of oversold territory (lower gray dashed line), it makes it harder for a stock to keep falling. If that buying momentum remains, it will push the stock price higher. And that’s what I’ll be watching for from here… The RSI rallying through resistance could quickly see CVX trading back around $145–150. Regards, Larry Benedict Editor, Trading With Larry Benedict Mailbag Will Chevron manage to bounce? Let us know your thoughts at feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [Sell YOUR Stocks… Keep Only ONE (ticker revealed)]( Jeff Clark predicted the crashes of 2008, 2020, & 2022 – helping his readers dodge huge losses. He then helped double his readers’ money 13 TIMES in the last year alone… But after watching his OWN 23-year-old son lose -60% in risky crypto & tech stocks… Jeff is finally coming forward with his biggest WARNING yet. Jeff says: “Sell Your Stocks BEFORE The Stock Shock!” [Click Here to See Jeff’s New Warning.]( P.S. – Jeff refuses to watch his own son lose any more money in risky investments. So, he is rolling the camera to help him win back all his losses – and then some – [with just ONE ticker.]( [image]( [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). © 2023 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](