IBD Stock Analysis
- Nears 30.65 official buy point
- Already flashing early entry after Wednesday’s high-volume jump
- Energy stocks leading with crude oil prices high
Industry Group Ranking
Cup with Handle
* Not real-time data. All data shown was captured at
1:03PM EDT on
Devon Energy has drilling operations in the Delaware Basin, Eagle Ford, Anadarko Basin, Powder River Basin and Williston Basins. But like all other shale oil producers, Devon Energy’s stock is highly dependent on oil prices.
Crude oil prices have swung wildly during the Covid-19 pandemic. Oil prices rose amid a hopeful “hot vaxxed summer.” But airlines have warned of a slowdown in fall bookings as the delta variant spreads.
As travel drops, other factors are helping boost oil prices. U.S. oil stockpiles fell last week as the Gulf of Mexico continues to recover from the devastation of Hurricane Ida, according to the Energy Information Administration’s weekly report Wednesday.
Also, a cold winter looms, and a Bank of America Global Research report said Monday that oil could hit $100 per barrel in the next six months.
U.S. independent producers like Devon Energy could return to drilling new wells as oil prices remain above $70 per barrel and the backlog of drilled but uncompleted wells drops, according to a recent Reuters report.
U.S. crude oil prices dipped 0.3% to $72.41 per barrel on Thursday. Brent was off 0.1% to $75.40.
Devon Energy shares fell 1.2% to 29.96 on the stock market today. Investors have an opportunity to buy DVN stock after it broke a downward trend line in its handle Wednesday, surging 7.3% in heavy volume. Devon stock is close to an official 30.65 buy point of a cup-with-handle base, according to MarketSmith analysis.
But buying early has been key in 2021’s choppy market rally and sector rotation. That’s especially important for energy stocks, which are prone to big swings along with the underlying price.
DVN stock has a 91 Composite Rating out of 99 and an EPS Rating of 65. The Composite Rating compiles scores on key fundamental and technical metrics: earnings and sales growth, profit margins, return on equity, and relative price performance.
CAN SLIM investors focus on stocks with a Composite Rating of 90 or higher.
Energy stocks have dominated the Stock of the Day list. Denbury (DEN) was the Stock of the Day on Sept. 2 and the ETF Energy Select Sector SPDR (XLE) was the Stock of the Day on Sept. 13. DEN stock is near an early entry, with the XLE ETF flashing an aggressive entry.
Follow Gillian Rich on Twitter for energy news and more.
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