FEZ and EWJ Take a Huge Fall after 7% Crash of Chinese Market
(Continued from Prior Part)
Oil and gas industry and FEZ
The oil and gas industry contributed the lowest negative return of 1.6% to the performance of FEZ on Monday, January 4, 2016. The tension between Iran and Saudi Arabia and the end to diplomatic ties between the countries may raise concerns over possible oil supply disruptions.
News of Saudi Arabia’s executions of 47 people on Saturday, January 2, 2016, made oil prices go up in early trade on Monday, January 4. But prices closed marginally lower due to global sell-off pressures. Oil and gas stocks for Total (TOT), Repsol, and Eni SpA (EAA) fell 1.7%, 0.59%, and 2.6%, respectively, that day.
The United States Oil ETF (USO) fell 0.18% on January 4. US oil and gas stocks for Exxon Mobil (XOM) and Chevron (CVX) fell 0.63% and 1.2%, respectively, that day.
Lower crude oil prices will benefit the Eurozone economy, according to a report published by the Joint Research Centre. The report also stated that since the Eurozone economy is the net importer of crude oil, it could boost the region’s economy. To know more about falling crude oil prices, read Falling Oil Prices Could Boost the Eurozone’s Economy.
Moving averages
- Total is trading 6% below its 100-day moving average, 8% below its 50-day moving average, and 4% below its 20-day moving average. The 50-day moving average is a strong resistance for the stock. The stock crossed its 50-day moving average on October 2, 2015, and was trading above it until December 3, 2015. That day, it fell again and traded below its 50-day moving average.
- Eni SpA is trading 8% below its 100-day and 50-day moving averages, and 4% below its 20-day moving average. The 100-day moving average is a strong resistance point for the stock.
- Repsol is trading 14% below its 100-day moving average, 12% below its 50-day moving average, and 6% below its 20-day moving average.
Analyst estimates
Analyst estimates suggest an upside of 18% for Total and Eni SpA and 34% for Repsol over the next 12-month period from the current levels as of January 4, 2016.
In the next part of this series, we’ll analyze the performance of EWJ’s various stocks on January 4, 2016.
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