EW analysis - CVX gathering new strength or loosing steam?In the short run we will probably see rising prices in the gas and oil markets.
Can energy companies like Chevron benefit from that expected movement?
It is not easy to tell. This year so far the performance was quite meager.
But in the near future we should see an upward move in CVX.
The only question is, whether it is a final move without much steam or the beginning of a large wave 5 that could lead to a DOUBLING of prices.
At the moment I prefer the second interpretation. Then would we have seen is a double 1 - 2 as illustrated in the chart.
The alternative would be an expanding ending diagonal as illustrated in the chart below. In both cases we should soon see a move to the upside. But in the case of an ending diagonal the gains would be capped somewhere between 210 an 220 USD.
At the moment I favor the first interpretation (double 1 - 2).
Pros:
Both upward moves look impulsive they can be counted as five waves
I expect the general market as represented by the S & P 500 to appreciate big time
Energy prices will climb in the near time
Wave 5 in a commodity related stock often expands and is the largest wave
Cons:
CVX profited from high energy prices due to the Russian-Ukrainien war last year
Green energy an ESG could become a problem for CVX
Higher energy prices will not be sustainable in the long run
An ending diagonal in a commodity related stock is rare.
