Oil is traded higher on Friday because of geopolitical tensions, which have also caused some oil stocks to move up.

As you can see on the chart below, Chevron Corporation (NYSE:CVX) is no exception. This is why our team of expert technical analysts has made it our Stock of the Day.

Moves in financial markets are determined by supply and demand. It's basic economics. If the supply and the demand aren't equal, the market will adjust and try to find equilibrium.

For example, if there isn't enough supply (sell orders) in the stock market to fill all of the buy orders (demand), the price will move higher. This happens because investors and traders who wish to acquire shares will be forced to pay premiums to attract sellers’ interest and draw them into the market.

But the tide turns when a stock reaches a resistance level.

At these levels, there is more than enough supply to fill the demand. Traders can buy all the shares they need without worrying about pushing the price higher.

Read Also: Chevron Q3 Earnings: Production Boost By PDC Energy & Permian Basin, Targets $2-$3 Billion In Structural Savings By 2026

As you can see on the chart, the $152.50 level has been resistance for Chevron for about a month.

This isn't a coincidence. There is resistance at this level for a reason. It is because it had previously been a support level.

Levels that had been support turning into resistance are common in financial markets. This is due to “buyer's remorse.”

Some investors and traders who bought shares around the support in June and July thought they made a good move when the price increased soon after.

But when the support eventually broke, and Chevron moved lower, they changed their minds. A number of these remorseful buyers had second thoughts and decided to sell. However, they would only sell if they can do so at breakeven and not lose money.

As a result, when Chevron finally rallied back to their buy prices, they placed sell orders. This large concentration of these sell orders has caused resistance to form at the same level that had previously been support.

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