Pullbacks to the 200-day moving average have meant big monthly returns in the past
Chevron Corporation (NYSE:CVX) is in the news today after comments from its CEO Mike Wirth pointed to Western governments for the global gas and oil crunch. Oil prices have been moving higher this afternoon amid concerns over tightening supplies, and taking shares of Chevron with it. The stock was last seen up 4.1% at $164.10, and there is historical evidence that suggests the equity could see even more upside in the next month.
It's been a choppy six months for the blue-chip oil name, with a recent ceiling emerging at the $165 region. Most recently, this level sent CVX pulling back within one standard deviation of its 200-day moving average. According to a study from Schaeffer's Senior Quantitative Analyst Rocky White four similar pullbacks have occurred over the past year. The equity was higher one month out during all four instances, averaging a 9.1% pop. A similar move would launch the security over the $165 mark, putting it just above $179 for the first time since June. A move of this magnitude would also put it back within a chip shot of its June 8 record high of $182.40.
A bull note from Scotia bank also came in today, with the analyst lifting its price target to $170 from $167. There's room for more bull notes, too, as seven of the 16 in coverage consider CVX a "hold" or worse. Plus, the 12-month consensus price target of $181.54 is a relatively muted 10.5% premium to current levels.
Short sellers, meanwhile, have been jumping ship. Short interest dropped 17.4% in the last two reporting periods and now makes up a slim 1% of the stock's current available float.