This article originally appeared on RealMoney.com on Sept. 4, 2014 at 3:33 p.m. To read more content like this AND see inside Jim Cramer's multi-million dollar portfolio for FREE... Click Here NOW.
Chevron's (CVX) early-September action has been very disappointing. Similar to many of the big oil names, it has lagged the market noticeably last month.
Chevron ended August right at its highs for the month, as the rebound following the late-July flush continued, but heavy resistance near a now-declining 50-day moving average along with very tepid buying of late have led to a new fade. The stock is off just shy of 1% and appears on the verge of a fresh leg lower.
In late July, Chevron took a nasty turn after hitting fresh 52-week highs. The stock left behind a spike high near $135.00 before breaking down. The lack of momentum pushing it to new highs signaled a potential problem. By the last session of the month, which attracted very heavy trade as shares slid 2.5%, a key trendline was broken. Heavy damage was done as a major high was left behind a week prior.
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The stock is still trading within its four-week range, but I believe the lower trendline will give way soon. Once the August low is breached, I expect a new down leg to gain steam. There is considerable support near the 200-day moving average ($123.00), but I believe this level will be taken out as well if selling pressure picks up.
Chevron could be headed for the $120.00 area in the coming weeks.
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