Should You Pick EOG Resources Stock Ahead Of OPEC Decision?

Propelled by the rally in benchmark prices, EOG Resources stock (NYSE: EOG) surpassed pre-Covid levels in recent weeks. The company has been managing a prudent capital investment plan in the past few quarters to preserve cash for any adverse pandemic scenario. While the recent uptick has been driven by macroeconomic factors, Trefis believes that the stock has little more room for growth as highlighted by our Machine Learning Engine. Considering the trends in stock price data, EOG Resources stock is likely to move 1.3% in the next one-month (twenty-one trading days) period after experiencing -1.2% contraction in the past week (five trading days).

But how would these numbers change if you are interested in holding EOG Resources stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test EOG Resources stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

MACHINE LEARNING ENGINE – try it yourself:

IF EOG stock moved by -5% over 5 trading days, THEN over the next twenty-one trading days, EOG stock moves an average of 2 percent, with a 55.3% probability of a positive return over this period.

Also, given a -5% movement for the stock over 5 trading days, it has historically witnessed an excess return of 0.4% compared to the S&P500 over the next 21 trading days, with a 46.9% percent probability of a positive excess return

Some Fun Scenarios, FAQs & Making Sense of EOG Resources Stock Movements:

Question 1: Is the average return for EOG Resources stock higher after a drop?

Answer:

Consider two situations,

Case 1: EOG Resources stock drops by -5% or more in a week

Case 2: EOG Resources stock rises by 5% or more in a week

Is the average return for EOG Resources stock higher over the subsequent month after Case 1 or Case 2?

EOG stock fares better after Case 2, with an average return of 2% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 2.3% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how EOG Resources stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold EOG Resources stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For EOG stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

Question 3: What about the average return after a rise if you wait for a while?

Answer:

The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although EOG stock appears to be an exception to this general observation.

EOG’s returns over the next N days after a 5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for EOG Resources stock by changing the inputs in the charts above.

While EOG Resources stock is likely to trend in-line with broader markets, it is helpful to see how its peers stack up. EOG Resources Stock Comparison With Peers summarizes how EOG compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.

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