CHV trade ideas
CVX breaks downThis week CVX broke down from its retracement. On Tuesday there was a shooting star, followed on Wednesday by another candle forming the double negative of a tweezer top with dark cloud cover. After bad earnings on Friday it created a breakaway gap. The last three down moves (head and the two shoulders are around $12 each time in about 25 days. I am looking for a move in the next 25 trading days to $110.
Head and Shoulders TopThis week I will post two Oil stocks (CVX and TSO), both appearing to meet the requirements for Head and Shoulder tops. You may want to put them on your watch list.
This pattern is the easiest recognized, but can turn into an Acc/Dist pattern if the classic rules are not met. Beyond the H & S pattern he first rule is an uptrend line is broken as this did in June. The most important rule is that the volume decreases from the Left shoulder to the Right shoulder using CMF or OBV. Next the neckline breaks and then a retrace occurs to the .500 Fib. I also like to use the 200 day SMA (I first began TA after reading Joe Granvilles book and use his rules for the 200 day, (and yes I know he fell out of favour). CVX appears to be meeting all these requirements although it may still go to the $120.00 level. I believe it needs to confirm the pattern by re-breaking the neckline. As earnings are reported on Nov 1st it may move sideways before going down.
Remember predicting a three day weather forecast is 25 times more accurate than a three day stock forecast.
$CVX: When It Gets Here, Buy It Chevron Corporation (NYSE:CVX) continues to fall, even as the markets float higher. The stock has collapsed from a recent high of $126.50 to a low today of $115.32. As it falls, look for the master support level of $114.85. Should that level hit today or tomorrow, it is a long swing trade with an upside bounce target of $120.00.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Chevron fundamental and technical data look goodChevron is one of the shares, that I would trade frequently because of the good fundamentals. We currently have a good long opportunity with risk/reward ratio of about 1.5.
BUY Crude Oil (OIL), SELL SHORT Chevron (CVX)How is it that crude oil is so far out of sync with the price of energy stocks?
This chart shows you very clearly how they move together, but at times they reach extremely far apart. After an extreme, they come back together in a dramatic fashion.
I can't wait until Tradingview has ratio charts so you can see what the ratio chart looks like.
The lift in crude oil futures today and the drop in CVX could be the beginning of the closing of this very wide spread.
I believe the upside here is 10% over the next month with a downside risk of 5%. Since this is a pairs trade, don't just cherry pick one side of this trade because I don't know which side of the trade will generate the profit. It could be that CVX falls and OIL stays the same.
Technical Tim
Wed, Oct 10, 2012 12:40AM EST
