Chevron (CVX) is a leader in a wide array of energy stocks which has turned into a standout price performance so far this year. As of May 16, Dow Jones stocks have risen more than 45% year-over-year and traded near a new high in a market where most stocks have fallen.
Chevron and other oil and gas stocks have been a haven for investors in the recent turmoil. Rising first-quarter earnings helped push Chevron stocks to a new high on Monday, but shares fell sharply. Should you consider adding this stock to your portfolio?
Currently, the stock market is under upward pressure, which means it’s not the best time to buy stocks, but it’s the best time to identify the top competitors on your watchlist. Investors should look for leading stocks among the leading industrial groups that are outperforming the market. You can also consider buying small positions in certain stocks that look promising, if the market decides to rally.
Chevron technical analysis
Chevron stocks tried to break above the flat base above 174.86 by points. Shares rose above the buying point on May 16, but were returned to this level. After a brief dip in the 7% selling area, the stock successfully held support at the 50-day line, reversed and headed back into the buying zone.
After a successful breakout last October, Chevron’s stock has reached new heights. The shares have held above their 50-day moving average since the breakout and even when forming the current flat base, without a few slips in the last few weeks.
Chevron stock still maintains an excellent relative strength rating of 98, which is above the minimum 80 for growth stock competitors. Ideally, when a stock breaks its line of relative strength should be at or near a new height. Chevron also checks that box.
Another consideration for the stock is its current fund ownership. Chevron Stock has seen a rise in mutual fund ownership in recent quarters, with stock ownership reaching 2,850 funds in the March-end quarter. This is up from 2,774 funds in the previous quarter.
In the industry of Chevron Stock No.2
According to the IBD stock checkup, Chevron’s stock ranks 2nd in terms of composite ratings among the integrated oil and gas industry group.
Due to the rise in oil prices, which rose to 100 100 a barrel in the first quarter from below 72 72 at the end of 2021, Chevron, the largest oil company in the United States, and Exxon Mobil (XOM), reported strong earnings for the quarter ended March.
Oil and natural gas prices have risen sharply since Russia’s invasion of Ukraine, and have no doubt helped Chevron. The California-based firm said in a recent Investors’ Day presentation that it was increasing production in the Permian Basin. The Permian Basin is the largest production area in the United States, with a huge shale oil field in Texas and New Mexico.
Chevron’s unconventional production, which typically involves horizontal drilling and fracking, rose to a record 692,000 barrels of oil per day in the Permian Basin in the first quarter. The company has raised the 2022 output guideline for the area from 700,000 to 750,000 barrels per day. This represents an increase of more than 15% from 2021 The company plans to increase production in the Permian Basin to 1 million barrels per day by 2025
However, Chevron does not want to increase overall production too much. Typically, when oil and gasoline prices rise, oil companies invest heavily in increasing production. But at the moment, Chevron is making high profits without flooding the market with very fast-growing supplies.
In a recent New York Times story, CEO Michael Worth noted that Chevron’s reluctance to invest heavily to further increase output is due to the high level of uncertainty in the world at the moment. “One of the lessons of history is that bad times don’t last forever, just as prices don’t get stronger.”
“It’s all a function of restarting our machine. The last two years have been turbulent and unpredictable,” Worth said. He added that Chevron is “on track to achieve higher returns.”
Chevron is an integrated oil and gas firm, meaning it participates in multiple aspects of the business value chain. These include upstream (manufacturing), midstream (pipeline and storage) and downstream (refining and marketing) activities. Chevron divides its reporting into two main parts: upstream and downstream.
The upstream segment primarily explores, develops and produces crude oil and natural gas. The company rolls the aspects of product transportation, storage and marketing into its upstream segment. Chevron’s downstream segment mainly produces crude oil refined petroleum products, as well as renewable fuels.
On April 29, Chevron reported first-quarter revenue of $ 54.4 billion, up from $ 32 billion in the same quarter in 2021. Which represents an increase of 70% per annum. EPS jumped 90 cents to $ 3.25 per share, up 261%.
U.S. upstream operations grossed মোট 3.24 billion in the first quarter, up from $ 941 million a year earlier. International upstream operations earned 3.7 billion, up from $ 1.41 billion a year ago. The upstream segment basically generated all of the company’s revenue for the quarter.
Bought a Chevron stock?
Chevron stock should not be bought at this time. The market outlook has already returned to a correction after briefly launching a new uptrend by underscoring the current environmental instability. Also important is that the Chevron stock was returned to the buy point and returned to its base.
Investors looking to buy the stock can start a small size position if the stock holds above the correct entry, although this would be a risky trade. One of the best strategies to use is to move the pyramid to a location that will protect against large-scale damage. Volatile markets can be forgiving in this way so it is better to be cautious.
Below 5% Buy Zone, Chevron Stock is currently in a potential breakout position. Investors will have to wait for the stock to rise and stay above the 174.86 buy point. The strong earnings of the stock and the RS line to new heights also support a bullish case. Be sure to check out the IBD Stocklist and other IBD materials to find the best stocks to buy or view in the current market.
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