CVX closes above its opening price after recovering from early selling pressure


Chevron Corporation (CVX) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team

Highlights

CVX loses $2.33 (-2.7%) after posting weak earnings
CVX breaks back below 100-day moving average
CVX falls to lowest close since July 9th
CVX closes above its opening price after recovering from early selling pressure
CVX finds buyers at key support level

Overview

Moving lower for the 2nd day in a row, CVX finished the month -5.93% lower at 83.94 after losing $2.33 (-2.7%) today on high volume, significantly underperforming the Dow Indu. (0.44%) following today's earnings report. Today's close at 83.94 marks the lowest recorded closing price since July 9th. Trading up to $1.74 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.

Daily Candlestick Chart (CVX as at Jul 31, 2020):

Daily technical analysis candlestick chart for Chevron Corporation (CVX) as at Jul 31, 2020

CVX reported earnings of $-1.59 per share before today's market open. With analysts having expected an EPS of $-0.93, Chevron Corporation failed market expectations by -71.0%. The company's last earnings report was released on May 1, 2020, when Chevron Corporation reported earnings of $1.29 per share topping market expectations by 101.6%.

Friday's trading range has been $2.59 (3.11%), that's slightly above the last trading month's daily average range of $2.55. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CVX.

One bullish candlestick pattern matches today's price action, the Hammer.

After trading down to 81.51 earlier during the day, the market bounced off the key technical support level at 82.50 (S1). The failure to close below the support could increase that levels importance as support going forward. Chevron closed back below the 100-day moving average at 86.07 for the first time since July 20th. When this moving average was crossed below the last time on July 20th, CVX actually gained 7.18% on the following trading day.

The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.

Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post weak Earnings Report" stand out. Although it is usually interpreted as neutral, it has actually shown to be bearish for Chevron. Out of 11 times, CVX closed lower 54.55% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 90.91% with an average market move of -2.18%.


Market Conditions for CVX as at Jul 31, 2020

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CVX stuck within tight trading range

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