Chevron has been in consolidation mode since late November. After a sharp rise off the late October lows, which lifted CVX nearly 50%, the stock needed a rest. The bull flag that followed may soon give way to a fresh rally leg.
The current six week bull flag has remained above the 200 day moving average. CVX has not spent this much time above its 200D since the summer of 2019. The 50D will close out this week above the 200D, first bull cross since March of 2019. The daily MACD, which reached overbought levels in late November, is back to neutral.
A key hurdle in the near term is the December high($94.60). Once cleared CVX will have room to run. On the downside, a close back below $83.00 would violate this week’s low indicating a more drawn out consolidation will be needed before a fresh rally leg can develop.
We are long CVX in some managed accounts.