Chevron (CVX) and Exxon Mobil  (XOM)  reported quarterly results before the opening bell with muted volatility. Both belong in investor portfolios due to their generous dividend yields of 4.07% and 3.84%, respectively. Be prepared to buy these stocks on weakness to my value levels given the positive weekly chart for the Nymex crude oil futures contract. 

Chevron and Exxon Mobil set their post-election highs of $119.00 and $93.21, respectively, on Jan. 3 and Dec. 13. The energy giants and components of the Dow Jones Industrial Average are in correction territory vs. these highs. They set their post-election lows on July 11 and June 2, respectively. These stocks correlate well to the pattern for oil.  

The Nymex crude oil futures contract is trading just above $49 per barrel this morning. Crude oil set its post-election high of $55.24 on Jan. 3 and set its post-election low of $42.05 on June 21. Oil has been below its 200-week simple moving average since the week of Aug. 22, 2014, and this "reversion to the mean" is now $62.29. Oil's weekly chart will end this week positive with the futures contract above its five-week modified moving average of $46.76. This should help the weekly charts for Chevron and Exxon Mobile.

Weekly Chart for Chevron

Courtesy of MetaStock Xenith

The weekly chart for Chevron ($106.11 on July 27) will end the week positive if the stock closes above its five-week modified moving average at $105.05. Strength above its 200-week simple moving average at $107.01 would be positive for momentum. The 12x3x3 slow stochastic reading is projected to rise to 28.86 this week up from 26.03 on July 21.

Trading strategy: Buy weakness to my quarterly value level of $104.80. My semiannual value level lags at $93.77 with my annual risky level of $136.08.

Weekly Chart for Exxon Mobil

Courtesy of MetaStock Xenith

The weekly chart for Exxon Mobil ($80.83 on July 27) needs to close above its five-week modified moving average at $81.06 to be upgraded from negative to neutral. If this happens, the upside is to the 200-week simple moving average, now at $88.06. The 12x3x3 weekly slow stochastic reading is projected to slip to 36.62 this week down from 38.18 on July 21.

Trading strategy: Investors bought Exxon Mobil on weakness to my June value level of $79.55 on June 2. Buy weakness to my annual value level of $73.93. Penetrating and holding my semiannual and quarterly pivots of $81.45 and $83.61 targets my annual pivot of $90.11, which failed to hold as 2017 began.

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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