Chevron (CVX) remains a dominant force in the integrated energy sector, managing the entire oil and gas lifecycle from extraction to retail. On Monday, the stock gained significant tailwinds, rising more than 5% on more than three times average daily trading volume. The move was fueled by news developments from Venezuela – a region where Chevron has a distinct competitive advantage due to its already existing infrastructure on the ground.
From a technical perspective, Monday’s price action was important. The push higher resulted in an acceleration above the long-term downtrend line that has been in place since the end of 2022. For this breakout to be consolidated, we need to see the momentum continue into Tuesday, specifically with the price closing above Monday’s high. If this happens, the stock will likely test the next major resistance level at $168.96.
Once this resistance is removed, the breakout is secured. In this scenario, the top of the old downtrend line at $159.84 would flip from resistance to key support. Any pullbacks to this level should be viewed as buying opportunities. This setup creates a high probability buy trade with a target price of $177.35.
However, caution is still warranted. The situation in Venezuela is fluid and continues to evolve. If the stock pulls back and closes again below the downtrend line, the current upside breakout will be canceled.
