Oil prices dipped on Wednesday, as refined product inventories in the United States rose in what the market interpreted as a sign of lacklustre demand.
US West Texas Intermediate (WTI) crude futures were at $57.37 a barrel at 0132 GMT, down 25 cents, or 0.4 per cent, from their last settlement. Brent crude futures, the international benchmark for oil prices, were down 24 cents, or 0.4 per cent, at $62.62 a barrel.
Traders said the lower prices came after a report by the American Petroleum Institute (AI) late on Tuesday that showed a 9.2 million barrel rise in gasoline stocks in the week to Dec. 1, and a boost of 4.3 million barrels in inventories of distillates, which include diesel and heating oil.
The perception that the higher fuel stocks pointed to weak demand outweighed the fact that crude inventories fell by 5.5 million barrels, to 451.8 million, traders said.
Outside the United States, analysts said that a supply cut led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia, which is predictable to last throughout 2018, has assisted Brent prices rise by over 40 percent since June, and by more than 130 percent since January 2016, when they hit their lowest level since 2003.
With the supply cuts likely in place throughout 2018, analysts said crude prices were well supported. “Robust global demand and tight supplies should see Brent crude oil rise to $70 per barrel by mid-year (2018),” said Bank of America Merrill Lynch in its 2018 outlook.
One factor that could undermine OPEC’s and Russia’s effort to cut supplies and prop up prices is US oil production, which has risen by 15 per cent since mid-2016 to 9.68 million barrels per day, close to levels of top producers Russia and Saudi Arabia. “US shale producers continue to win market share,” said Fawad Razaqzada, analyst at futures brokerage Forex.com. (Source: Reuters)
Hot Stock to Watch: Chipotle Mexican Grill, Inc. (NYSE: CMG)
Chipotle Mexican Grill, Inc. (NYSE: CMG) stock experienced a change of -0.01% in final minutes of Tuesday’s trading session. The stock closed the last trade at $315.56. Investors mark this stock “active” as it exchanged hands with 1,153,689 shares contrast to its average daily volume of 1.42M shares.
To evaluate a picky trading instrument, an investment sector or the market as a whole is termed as Stock Analysis. Stock analysts try to figure out the future activity of an instrument, sector or market. Stock analysis is mainly of two types: one is fundamental and the other is technical. One can easily perform a fundamental analysis by having an eye on data from sources counting financial records, economic reports, company assets and market share. Technical analysis focuses on the study of past market action to predict future price movement.
Stock’s Performance Analysis (Weekly, Monthly & Year to Date):
The stock has returned -16.37% since the starting of the year when viewing the starting price as compared to the ending price. To clear the blur picture investors will need to look a little deeper. The stock has returned 10.39% weekly, which was maintained at 15.37% in the 1-month period. The company has the market capitalization of $8.84B while its P/B ratio was 6.46. Institutional investors own 91.40% stake in the company while Beta factor, which is used to measure riskiness of the security, was 0.47.
Stock’s Technical Analysis:
To evaluate a stock further, one must need to review its technical levels at regular intervals. Moving averages (MA) are one of the most accepted and often-used technical indicators. The moving average is easy to calculate and, once plotted on a chart, is a powerful visual trend-spotting tool. In theory, there are an infinite number of simple moving averages, but the most common are three SMA20, SMA50, and SMA200. SMA20 is the last stop on the bus for short-term traders. Beyond SMA20 one is basically looking at primary trends. SMA50 is used by traders to gauge mid-term trends. Whereas long-term trend followers generally uses SMA200 and most investors will look for a cross above or below this average to represent if the stock is in a bullish or bearish trend. At the time of writing, shares were trading 10.54% away from the 20-days simple moving average and -16.72% away from the 200-days simple moving average.
Based on a recent bid, the stock is trading -36.76% away from its 52-week high and 19.98% away from its 52 week low. The Price vs. 52 Week High indicators basically gives the clue to identify price direction. Academic research has shown that stocks close to their 52 week highs tend to outperform. This is apparently because shareholders use the 52-week high as an “anchor” against which they value stocks, thus they tend to be reluctant to buy a stock as it nears this point regardless of new positive information. As a result, shareholders under-react when stock prices approach the 52-week high, and as a result, contrary to most shareholders’ expectations, stocks near their 52-week highs tend to be systematically undervalued.
Relative Strength Index (RSI):
The relative strength index (RSI), developed by J. Welles Wilder, and is a technical indicator used in the analysis of financial markets. It is intended to chart the current and historical strength or weakness of a stock or market based on the closing prices of a recent trading period. The indicator should not be confused with relative strength.
The RSI is classified as a momentum oscillator, measuring the velocity and magnitude of directional price movements. Momentum is the rate of the rise or fall in price. The RSI computes momentum as the ratio of higher closes to lower closes: stocks which have had more or stronger positive changes have a higher RSI than stocks which have had more or stronger negative changes.
The RSI is most typically used on a 14-day timeframe, measured on a scale from 0 to 100, with high and low levels marked at 70 and 30, respectively. Shorter or longer timeframes are used for alternately shorter or longer outlooks. More extreme high and low levels—80 and 20, or 90 and 10—occur less frequently but indicate stronger momentum. After a recent check, Chipotle Mexican Grill, Inc.’s 14-day RSI is presently at 66.83.
Analysts’ Suggestions in the Limelight:
The stock received analysts’ mean target price of $316.89. This is the projected price level of a financial security stated by an investment analyst or advisor. Shareholders can make better decisions if they focus on target prices, which convey more information for evaluating the potential risk/reward profile of a stock. However, analysts’ mean recommendation for this stock stands at 2.90. Analyst recommendations as stated on FINVIZ are rated on a 1 to 5 scale. 1 is equivalent to a buy rating, 3 a hold rating, and 5 a sell rating. The consensus recommendation is the average rating on a stock by the analyst community.
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