Exxon Mobil Corporation explores for and produces crude oil and natural gas in the United States, Canada/South America, Europe, Africa, Asia, and Australia/Oceania. The company operates through Upstream, Downstream, and Chemical segments. It also manufactures petroleum products; manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene, and polypropylene plastics, as well as various specialty products; and transports and sells crude oil, natural gas, and petroleum products.
Take a look at the 1-year chart of Exxon (NYSE: XOM) below with added notations:
XOM has been trading mostly sideways over the past 3 months. While in the sideways range, the stock has formed a support area near $80 (green) and a clear resistance level at $83 (red). At some point, the stock will have to break out of the current trading range.
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The Tale of the Tape: XOM is trading within a sideways range. The possible long positions on the stock would be either on a pullback to the $80 area, or on a breakout above $83. The ideal short opportunity would be on a break below $80.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital
preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach