Oil Stock's Buy Signal Has Never Been Wrong
The stock has pulled back recently with crude oil prices
Energy stocks have taken a hit this week, as crude oil prices dropped on oversupply concerns. However, it could be time to buy the dip on one oil stock: Marathon Oil Corporation (NYSE:MRO). The shares have pulled back to a key trendline, which has had very bullish implications for MRO in the past.
Marathon Oil stock has been in a channel of higher highs and lows since August 2017. More recently, the equity notched a three-year high of $24.20 on Oct. 3, before dropping back to the $20 level, which has provided a round-number floor for MRO since May. What's more, the stock is now within one standard deviation of its 160-day moving average, after a lengthy stretch above this trendline.
During the past three years, there have been seven pullbacks of this kind for MRO, per data from Schaeffer's Senior Quantitative Analyst Rocky White. One month later, the security was higher 100% of the time, averaging a healthy gain of 9.65%. From. MRO's current perch of $20.91, a similar pop would put the oil stock around $22.93
