EOG Resources, Callon Petroleum, and Matador Resources all found support at a key moving average this week, despite the attention on green energy.
Efforts to move away from fossil fuels will take time. Demand for fuel is growing as global economies recover. Fossil fuels power factories and other industrial output, which is different to what consumers think of energy for their cars or home heating.
The S&P 500 energy sector is up 20.46% in the past three months and is up 0.77% so far this month.
The year before, the sector ETFs declined 32.51%.
Houston-based EOG Resources is up 8.60% this week after declining last week. The stock bounced off its 10-week moving average and closed at $93.05, up $1.29 from the previous day.
On October 5, the stock cleared a cup-shaped base with a 29% correction. On the previous day, William Thomas retired and was replaced by Ezra Yacob. The change was made in June. The board has a succession plan and Thomas remains as non-executive chairman.
EOG's earnings and revenue growth rebounded in the recent quarters. According to MarketBeat data, analysts have a "buy" rating on the stock with a price target of $104.
A total of six analysts have boosted their price targets and/or upgraded their ratings since the company's earnings report earlier this month.
The Callon Petroleum, with a market cap of $3.443 billion, had the same chart action as EOG. Callon found support above its 10-week average after declining last week. The shares were up 5.96% for the day. The stock was close to the high of the trading range.
Callon is up $9.22 this week.
This stock broke out of a cup-shaped base in late June after Callon pulled back from a high.
After clearing that base, the stock fell below its buy point but still remained above its 10-week moving average, which may have given investors enough confidence to hold the stock. The recent support is a sign that institutional investors are still onboard.
Callon has grown revenue at double- or triple-digit rates in seven of the past eight quarters. The earnings growth rebounded in the past three quarters. The analysts see earnings growing this year to $9.01 per share, which is against an easy year-over-year comparison.
Matador Resources is following a similar pattern of clearing a cup base. The stock held up better than Callon. It was up to $47.23 on October 27 before pulling back, but is still above its 10-week average.
The stock closed at $44.47 Wednesday. The stock moved back to its 50-day moving average on November 19 and advanced in each of the next three sessions.
Institutional investors use moving average support as a reference point to monitor the stock for a point to add shares at a slightly lower price. That is a sign of confidence in the company.
MarketBeat data shows that analysts have a buy rating on Matador and a price target of $43.70. The downside target isn't something to worry about, as stocks often rally further before institutions take some profits off the table.
