Editor's pick: This article was originally published March 18.
TheStreet recently considered which of the two oil giants is the best dividend stock in the oil sector. The fundamental analysis in that article said that Exxon was the better bet. But what does the technical analysis say?
Based on our favorite technical indicators the winner is Chevron.
Despite the day-to-day swings in the price of crude oil and the zigs and zags of the dollar, Chevron stock has managed to develop a base pattern since July.
Prices made an August/September low, and then a higher low in January. Prices have crossed above the rising 50-day average and the flattening 200-day average line.
The On-Balance-Volume, or OBV, has followed the price action and is pointing up.
With no bearish divergences on the momentum study, prices are just about to break out over their early November high. I consider Chevron as the stronger choice.
So why does Exxon Mobil come in second?
The chart reader with a less discerning eye might say that this chart looks pretty strong too. But there are some slight differences.
Exxon Mobil has also made a higher low over the past several months. The OBV line is improving, but doesn't seem to be rising as fast as in Chevron stock.
Sure, Exxon is above its 50-day and 200-day averages, but the stock hasn't moved strongly away. While the 50-day average is pointed up, the 200-day is still pointed down.
Last, it looks like we will get to see a small bearish divergence with Exxon stock making a higher high and the momentum study making a lower high.
This bearish divergence may be just the thing that tips the scales in favor of Chevron.