Earnings Play: Chevron

How to play Chevron's 2Q earnings release.

Energy 3

On Friday, before market, Chevron (CVX) is anticipated to report second quarter LPS of $0.90 compared to an EPS of $2.27 a year ago on revenue of approximately $20.7B vs. $38.9B last year. Chevron is an energy company with exploration, production, and refining operations worldwide, and on July 30th, the company announced a four-year agreement with Algonquin Power & Utilities (AQN) to co-develop renewable power projects globally to provide electricity to Chevron's strategic assets.  

Looking at a daily chart, Chevron's stock price appears to be forming a downward channel that began developing in early-June after price peeked at just over $100.00. The RSI also appears to be forming a downward channel. The price of crude oil broke below its 20-day moving average today and touched its 50-day moving average for the first time in this rally that began in late-April. Also, the rising infection rate of COVID-19 globally could spur another series of travel bans and country lockdowns, adding to the bearish sentiment on energy markets. Chevron's stock price will likely continue to descend to its $82.50 support level. If price breaks below $82.50, it will probably continue falling to $78.50. If price can manage to rebound and get above its upper trend line, we could see a push to $92.75 or even $97.50. However, if the socioeconomic situation continues to worsen, it is more likely that energy companies will fall with the price of oil for the second time this year.           

Source: GAIN Capital, TradingView

Build your confidence risk free

More from Earnings

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.