NEW YORK ( TheStreet) -- Crude oil futures on the New York Mercantile Exchange began the year breaking below their 200-day simple moving average, a measure of the average stock price over a given period of time.
The Nymex's move down, in turn, pulled down shares of Chevron (CVX) and Exxon Mobil (XOM). Energy companies in the Dow Jones Industrial Average followed. Chevron broke below its 200-day on Jan. 10, followed by Exxon on Feb 3.
The 2014 rally in the energy sector began after crude oil set its 2014 intraday low at $91.24 on Jan. 9. Chevron didn't begin to rebound until setting its 2014 intraday low at $109.27 on Feb. 5. Exxon followed after trading as low as $89.25 on Jan. 6.
Crude oil rallied above its 200-day SMA when it was $99.39 on Feb. 7, and then traded back and forth around this key moving average before, hitting its 2014 intraday high of $107.68 on June 13.
Chevron moved above its 200-day SMA then at $120 on April 14. This stock set an all-time high at $135.10 on July 24.
Exxon rallied above its 200-day SMA then at $91.90 on Feb 18, and the stock set an all-time high at $104.76 on July 29.
Crude oil broke below its 200-day SMA at $99.77 on July 11, trading as low as $96.69 on Wednesday. Chevron fell as low as $124.58 on Tuesday, staying above its 200-day at $122.01. Exxon went as low as $97.78 on Tuesday, holding its 200-day SMA at $97.67.
The clear pattern so far in 2014 is that crude oil leads directional changes as Chevron and Exxon continued lower as the year began and then extended gains into July after crude oil peaked in June.