The Next Oil Stock Set to Surge

MPC is encountering a historically bullish trendline at the moment

by Emma Duncan

Published on Jan 10, 2020 at 12:22 PM
Updated on Jun 24, 2020 at 10:16 AM

Energy stocks have had a volatile start to 2020 amid the rise and fall of U.S.-Iran tensions, and Marathon Petroleum Corp (NYSE:MPC) is no exception. The oil name is facing off with its year-over-year breakeven point above, while also receiving support from the formerly resistant $57 mark. What's more, data from Schaeffer's Senior Quantitative Analyst Rocky White suggests MPC may be flashing a buy signal as it nears a historically bullish trendline.

Specifically, Marathon Petroleum stock has recently come within one standard deviation of its 200-day moving average, following an extended period above the trendline. The equity has seen three similar pullbacks within the past three years, which has resulted in an average 21-day gain of 10.4%, with all three returns positive. Another move of this magnitude from the stock's current perch of $60.55 would catapult MPC back near $67 for the first time since early November.

Daily MPC with 200MA and Highlight

Analysts have been heavily optimistic toward MPC's journey on the charts. Coming into today, all but two of the covering firms sport a "buy" or "strong buy" recommendation. What's more, the stock's average 12-month price target of $79.81 comes at a 31% premium to current levels.

However, short sellers have been heading for the exits. Short interest dropped a notable 11.7% during the past two reporting periods, and now accounts for a slim 2.3% of MPC's total available float. At Marathon stock's average pace of daily trading, it would take shorts just over two days to buy back their bearish bets.


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