Chevron Ready for a Break Out?

Published on Monday, 23 August 2010 05:12 Written by Christian Paolinetti

New York, August 23rd (TradersHuddle.com) - Shares of Chevron Corp. (NYSE:CVX) closed the trading session at $75.05 near its 50 day and 200 day moving averages currently set at $74.07 and $75.87 respectively. Chevron's price action is above the 50 day moving average but below its 200 day moving average, which provide a nice trading setup, with clear reference points.

Chevron Corporation is an integrated energy company with operations in countries located around the world. The Company produces and transports crude oil and natural gas. Chevron also refines, markets, and distributes fuels as well as is involved in chemical operations, mining operations, power generation and energy services. Chevron, the second largest U.S. energy producer and formerly known as ChevronTexaco, was founded in 1879 and its based in San Ramon, CA.

Chevron price action seems to be setting up for a tight range between the 50 day moving average as support and the 200 day moving average serving as resistance.

A tiered approach to enter the stock, appears to be the best way to maximize possible movements from the stock, as traders could enter Chevron with a small position and wait for the stock to break out above the 200 day moving average at $75.87, where traders could add to their position as momentum builds with the breakout. The flip side will be if support being referenced at the 50 day moving average set at $74.07 breaks it could mean further downside in the horizon for Chevron.