Tuesday 4 June 2013

MRO - new highs look viable

With the main indexes seeing weakness as the day progressed, Marathon Oil (MRO) similarly saw weakness, closing -1.4% @ $34.94. Price action of the past two weeks could be a bull flag, and would be highly suggestive of at least a re-test of the recent high in the upper $36s


MRO, daily


Summary

MRO closed down today, but it importantly held above the low from last Friday. So, we have a reasonably secure near term floor, and now the issue is just how high can it go.

Underlying MACD (blue bar histogram) cycle is still in negative territory, and ticked back lower today. Yet, considering the main market, I'd expect that to go positive no later than early next week.

The big issue in my view is just how high can MRO go this summer? Largely of course, it will be dependent upon the main equity market. If sp' can manage new highs in the low 1700s, then MRO would surely break into the 37/38s, perhaps even test the next psy' level of $40.

Considering the quality of the company, I'd be looking for $50 in the mid-term, but as ever...one trading day.. at a time.
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*I am long MRO, seeking an exit in the low $36s, within the next 2-3 days.