Extremely bullish sentiment could hurt ConocoPhillips as it faces resistance
The price of oil has been trending lower over the last seven months with the price putting in a series of lower highs since peaking at $66.60 in April. The price spiked in September when the attacks occurred on Saudi Aramco's production facilities, but have since fallen back down as the production interruption was minimal.
With oil trending lower, many big oil companies have seen their stock prices trend lower with the price of oil and ConocoPhillips (NYSE: COP) is one of those companies. Unfortunately for shareholders, the price of Conoco's stock has been trending lower for much longer. In fact it has been trending lower since peaking in October 2018. We see on the weekly chart that a trend channel has formed and the stock has just hit the upper rail of the channel.
It is also worth noting that the 52-week moving average is just above the upper rail and that means the stock will have to fight through two layers of resistance.
While the technical picture is a concern, the sentiment toward the stock could be an even bigger issue. There are 19 analysts covering the stock at this time with 16 "buy" ratings and only three "hold" ratings. This puts the buy percentage at 84.2% and that is higher than the average buy percentage.
The short interest ratio is at 1.7 currently and that is after the number of shares sold short increased by 11% in the most recent reporting period. Like the buy percentage from the analysts, this indicates extreme bullish sentiment.
From a contrarian perspective, seeing extreme optimism for a stock that is trending lower and doesn't have very good fundamentals is not what you want to see as an investor.
Speaking of the fundamentals, Conoco's are below average at best. The company saw earnings decline by 40% when it reported third quarter results recently and sales declined by 1% at the same time. Analysts expect earnings to decline by 19% for the year as a whole.
Looking at the Tickeron Fundamental Analysis Overview, we see a number of poor ratings. The worst rating is the Profit vs. Risk Rating which is at 100. This rating indicates that the returns do not compensate for the risks. Conoco’s unstable profits reported over time resulted in significant drawdowns within these last five years. 100 is the lowest score a company can get in this rating.
The Tickeron PE Growth Rating for Conoco is also bad with a rating of 81. This rating points to worse than average earnings growth for the company. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents. A rating of 1 indicates highest PE growth while a rating of 100 indicates lowest PE growth.
The Valuation Rating is also pretty bad at 73. This indicates that the company is slightly overvalued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization.
When you put all of this together—poor fundamentals, excessive optimism, and a stock price that is trending lower, it doesn't look good for ConocoPhillips to snap out of its downward trend.
Momentum Indicator for COP turns positive, indicating new upward trend
COP saw its Momentum Indicator move above the 0 level on March 17, 2025. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 87 similar instances where the indicator turned positive. In of the 87 cases, the stock moved higher in the following days. The odds of a move higher are at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where COP's RSI Indicator exited the oversold zone, of 24 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for COP just turned positive on March 12, 2025. Looking at past instances where COP's MACD turned positive, the stock continued to rise in of 41 cases over the following month. The odds of a continued upward trend are .
COP moved above its 50-day moving average on March 14, 2025 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for COP crossed bullishly above the 50-day moving average on March 24, 2025. This indicates that the trend has shifted higher and could be considered a buy signal. In of 18 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where COP advanced for three days, in of 331 cases, the price rose further within the following month. The odds of a continued upward trend are .
COP may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 10 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where COP declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for COP entered a downward trend on March 05, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 73, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. COP’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.072) is normal, around the industry mean (4.401). P/E Ratio (14.203) is within average values for comparable stocks, (19.066). Projected Growth (PEG Ratio) (0.867) is also within normal values, averaging (4.890). Dividend Yield (0.019) settles around the average of (0.085) among similar stocks. P/S Ratio (2.763) is also within normal values, averaging (161.036).
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General Information
a producer of wholesales oil and natural gas
Industry OilGasProduction