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.