Equity Clock

EOG Resources, Inc. (NYSE:EOG) – Clock That Stock

The Stock

EOG Resources, Inc. (NYSE:EOG) received an upgrade today from BMO Capital Markets from Underperform to Market Perform.   The analyst raised the price target from $83 to $100, below the current market value of the stock.   Oil and gas stocks have come under pressure today as an announcement released this morning indicated that oil and gas inventories remain above average.   Despite this EOG Resources has rallied over 3% today to around $107. 

Since mentioning this stock in a technical analysis report back on February 25th, the stock has appreciated by almost 15%, with the bulk of the returns coming in the last five days.  The company has rallied as a result of a presentation that emphasized the oil segment of the company, putting rest to concerns that natural gas, which has been subject to much pressure over the last couple of months, is not core to their business.   Investors immediately took interest in the company.

Analysts are maintaining an outperform rating on the stock, which continues to draw closer to topping out.   The stock is fairly valued at current levels, however if further strength in the energy sector continues then you could see this stock rise further to $110, at which point resistance will smother further upside.   However, with the report today regarding unexpectedly high oil inventories, the “energy” has been sucked out of the sector, hampering short-term prospects, yet leaving long-term prospects intact.

Chart Courtesy of StockCharts.com

The Clock

EOG Resources, Inc. (NYSE:EOG) remains within its period of seasonal strength that customarily tops out at the beginning of May.   The chart indicates gains of over 7% between now and May, but considering the run-up as of recent further gains will be significantly hampered.   The stock customarily tops out just before Q1 earnings, this year due out in May, before trading flat to negative.   Average gain over the period of seasonal strength is around 17% from the end of February to the beginning of May, and we currently sit at 19% over the period.   It was a good seasonal play, but further accumulation of the equity is not in favor.   Continue to hold and place stops at around current levels to protect gains.

EOG Resources, Inc. (EOG)     103.74

+ 6.36 (6.53%)

Seasonality Analysis

Analysis has revealed that with a buy date of January 29 and a sell date of December 28, investors have benefited from a total return of 1860.36% over the last 10 years.   This scenario has shown positive results in 7 of those periods.

Conversely, the best return over the maximum number of positive periods reveals a buy date of October 10 and a sell date of May 8, producing a total return over the same 10-year range of 1129.93% with positive results in 10 of those periods.

The buy and hold return for the past 10 years was 1060.69%.

Technical Analysis

Support 2

Support 1

Pivot Point

Resistance1

Resistance2

The Numbers

97.59

100.67

102.95

106.03

108.31

Most Recent Close:

103.74

Support/Resistance Analysis:

Broke Upr Resistance (2)

52-Week High:

105.24

MACD Analysis:

Positive/Increasing

52-Week Low:

54.86

MACD vs. Signal:

Above/Widening

Fib. Retracement:

~  100%

RSI Analysis:

Bullish

50-Day MA:

94.17

Stochastic (Fast) Analysis:

Increasingly Overbought

200-Day MA:

85.29

50 vs 200-Day MA Analysis:

50-day Above 200-Day MA

High Critical Level:

99.50

Year over Year Trend:

Strongly Gaining

Low Critical Value:

91.26

Critical Level Analysis:

Broke Above Previous Trend

Average Monthly Gain:

6.3%

MFI Analysis

Bullish Centerline Crossover

Technical Rating:

9

Candlestick Analysis

Neutral/Indecision

On a scale of 1 to 10, the higher the rating, the more appealing the investment is to buy at current levels.

Situational Analysis

Past Year

Advancing Sessions %

Return %

10-Year Average

Advancing Sessions %

Return %

Apr 7 thru May 7

57.1

27.1

Apr 7 thru May 7

55

9.8

Best Return: 34.1% – Sell May 6

Best Return: 13.3% – Sell May 1

Apr 7 thru Jul 6

50.8

8.3

Apr 7 thru Jul 6

53.4

7.9

Best Return: 34.2% – Sell Jun 12

Best Return: 22.4% – Sell Jun 3

Apr 7 thru Oct 4

54

40

Apr 7 thru Oct 4

52.6

13.3

Best Return: 45.6% – Sell Sep 22

Best Return: 30.9% – Sell Jul 10

Following Q1 Earnings Releases – Last 5 Periods

During Equivalent Periods of Economic Recovery where Unemployment has Peaked

5-Period Average

Advancing Sessions %

Return %

2-Period Average

Advancing Sessions %

Return %

30 Days After

51.7

0

90 Days After

52

-5

Best Return: 6.7% – After 14 Days on Average

Best Return: 8.1% – After 48 Days on Average

60 Days After

54.2

0.3

180 Days After

51.8

9.2

Best Return: 9.9% – After 31 Days on Average

Best Return: 14.3% – After 141 Days on Average

90 Days After

53.2

0.8

360 Days After

52.9

46.4

Best Return: 13.3% – After 38 Days on Average

Best Return: 63.2% – After 345 Days on Average

Further Analysis

Sector:

Energy

Industry:

Independent Oil & Gas

According to Thackray’s 2010 Investors Guide, the period of seasonal strength for the Energy Sector ranges from February 25th through to May 9th.   Seasonal influences are related to the transition period experienced by U.S. refiners when they convert their facilities to gasoline production for the summer driving season from heating oil production for the winter heating season. Inventory levels typically fall below average during this period.

Current Consensus Recommend:

Outperform

Recommendation 1-Month Ago:

Outperform

Recommendation 3-Months Ago:

Outperform

Disclaimer

Analysis, comments, calculations, and opinions offered in this report, available via EquityClock.com, are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed.

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Stocks mentioned in this post: EOG