Buy Chevron, Shell Over Exxon, BP as Oil's 'Wild Ride' Continues
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Nymex crude oil futures ended Thursday deep into bear market territory 33.1% below its 2018 high of $76.90 per barrel set on Oct. 3. Oil traded to its 2018 low of $49.41 Thursday below its "reversion to the mean" for the first time since the week of Dec. 15, 2017.

As oil slumps, Chevron Corp.  (CVX)  and Royal Dutch Shell PLC (RDS.A)  will outperform as they expand gas station locations. Exxon Mobil Corp. (XOM)  and BP PLC (BP)  do not appear to be in expansion mode at the pump. I like companies that operate where I live, in Tampa Bay, Fla. These oil majors are found throughout the country and investors filling up at the pump are likely to find a new Shell Circle K or a Chevron that could be replacing a BP.

Nymex crude oil futures ended Thursday deep into bear market territory 33.1% below its 2018 high of $76.90 per barrel set on Oct. 3. Oil traded to its 2018 low of $49.41 on Thursday below its "reversion to the mean" for the first time since the week of Dec. 15, 2017.

Weekly Chart for Crude Oil Futures

Courtesy of MetaStock Xenith

The weekly chart for Crude Oil is negative but oversold with oil below its five-week modified moving average of $59.85. Oil may end this week below its 200-week simple moving average or "reversion to the mean" at $52.24 for the first time since the week of Dec. 15, 2017. The 12x3x3 weekly slow stochastic reading is projected to fall to 13.64 this week down from 17.60 on Nov. 23 falling further below the oversold threshold of 20.00.

Given this chart and analysis, investors had the opportunity to reduced holdings at my quarterly risky level of $73.87 as the fourth quarter began. Oil is below my annual pivot of $63.81. Investors should buy weakness to my weekly value level at $45.65.

Chevron Corp. has been above its "reversion to the mean" since the week of Sept. 1, 2017. The stock is one of the eight "Dogs of the Dow" for 2018 and has a dividend yield of 3.93%. The stock is in correction territory 11.2% below its 2018 high of $133.88 set on Jan. 16. It's also 10.5% above its 2018 low of $107.54 set on Oct. 29.

Weekly Chart for Chevron

Courtesy of MetaStock Xenith

The weekly chart for Chevron is positive, with the stock above its five-week modified moving average of $117.62 and above its 200-week simple moving average of $106.87, which is the "reversion to the mean". The 12x3x3 weekly slow stochastic reading is projected to rise to 44.72 this week, up from 43.08 on Nov. 23.

Given this chart and analysis, buy weakness to the 200-week SMA of $106.87 and add to positions on weakness to my semiannual value level of $92.45. Reduce holdings on strength to my monthly and quarterly risky levels of $128.12 and $132.00, respectively.

Exxon Mobil has been below its "reversion to the mean" since the week of Nov. 16. The stock is also one of the eight "Dogs of the Dow" for 2018 and has a dividend yield of 4.37%. The stock is in correction territory 11.5% below its 2018 high of $89.30 set on Jan. 29. It's also 9.6% above its 2018 low of $72.16 set on April 2.

Weekly Chart for Exxon Mobil

Courtesy of MetaStock Xenith

The weekly chart for Exxon Mobil is negative with the stock below its five-week modified moving average of $79.22 and is below its 200-week simple moving average of $82.67, which is the "reversion to the mean". The 12x3x3 weekly slow stochastic reading is projected to slip to 32.25 this week down from 37.16 on Nov. 23.

Given this chart and analysis, buy weakness to my semiannual value level of $69.86 and reduce holdings on strength to my quarterly, monthly and annual risky levels of $78.50, $84.79 and $103.71, respectively.

BP PLC has been above its "reversion to the mean" since the week of Feb. 16. It may have a dividend yield of 6.02%, but the stock is deep in correction territory, 15.4% below its 2018 high of $47.83 set on May 21. The stock is 12% above its 2018 low of $36.15 set on Feb. 5. I live in Florida and it's hard to find a BP gas station anymore as some folks are still upset by the Deepwater Horizon oil spill of 2010.

Weekly Chart for BP Plc

Courtesy of MetaStock Xenith

The weekly chart for BP is negative but oversold with the stock below its five-week modified moving average of $41.68 and above its 200-week simple moving average of $37.40, which is the "reversion to the mean". The 12x3x3 weekly slow stochastic reading is projected to slip to 19.01 this week, falling below the oversold threshold of 20.00.

Given this chart and analysis, buy weakness to the 200-week simple moving average of $37.40 and reduce holdings on strength to my quarterly risky level of $46.04.

Royal Dutch Shell has been above its "reversion to the mean" since the week of March 30. The stock also has a dividend yield of 6.02% and is deep in correction territory 15.1% below its 2018 high of $31.38 set on May 22. The stock is 10.1% above its 2018 low of $24.20 set on Feb. 6. There are several new Shell gas stations being built in Tampa Bay with full grocery services. These go under the brand name Circle K.

Weekly Chart for Royal Dutch Shell

Courtesy of MetaStock Xenith

The weekly chart for Shell is negative, with the stock below its five-week modified moving average of $27.32 and above its 200-week simple moving average of $25.17, which is the "reversion to the mean". The 12x3x3 weekly slow stochastic reading is projected to slip to 22.78 this week down from 27.60 on Nov. 23.

Given this chart and analysis, buy weakness to my 200-week SMA at $25.17 and to my semiannual value level of $22.06 and reduce holdings on strength to my annual risky level at $31.14.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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