Is Chevron stock now a good buy after the latest gains?
- Chevron has returned 10% in five days.
- The stock remains strong fundamentally amid elevated oil prices.
- Chevron could face resistance at the descending trendline.
Chevron Corporation (NYSE:CVX) buyers have defended the $138 support. The stock is once again proving resilience, posting more than 10% gains in just five days. That comes after reports that OPEC+ were set for output cuts to tame falling oil prices.
Chevron, which reported $68.76 billion or £60.32 billion in revenue, has been benefiting from elevated oil prices. The revenue topped estimates of $57.69 billion or £50.6 billion. The EPS beat estimates by $0.80, underlining a solid year.
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If we turn to analyst expectations, the stock has a moderate buy rating. Ten analysts tracked by TipRanks have a moderate buy, while 4 assign a hold rating. Only one has a sell. The average projected price is $176.33, representing an upside of 12.36% from the current level.
However, investing in Chevron for its fundamentals alone could be far-fetched. For a stock that got buoyed by rising oil prices, a recession downturn could catch buyers by surprise. The latest decline to the $138 zone underlines price expectations around lower oil prices. Will the OPEC+ cut output on October 5?
Chevron stock price movement amid recovery from oversold $138 level
Technically, Chevron stock has been claiming lower highs, aligning with the $138 support. That has resulted in the formation of a descending trendline. Bulls must overcome the bear trendline if Chevron is to post further gains. A break above the trendline could see the stock head to $164.
Is it the right time to buy Chevron?
This article finds it worth investing in Chevron at better valuations. Although a breakout above the descending trendline is possible, the risk-reward ratio could be unconvincing.