Todays Big Stock: Exxon Mobil Corporation Common (NYSE: XOM)

Exxon Mobil Corporation is a manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a range of specialty products. It also has interests in electric power generation facilities. Exxon Mobil has several divisions and hundreds of affiliates with names that include ExxonMobil, Exxon, Esso or Mobil. Divisions and affiliated companies of ExxonMobil operate or market products in the United States and other countries of the world. Their principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products.

Before discussing potential trading opportunities for Exxon Mobil, please take a look at the 1-year chart of XOM (Exxon Mobil Corporation) below with my added notations:

XOM has an important, long-term price level at $80 (navy) and another lower, shorter-term level down at $75 (red/green). After breaking below the $80 level in August, XOM fell into a sideways consolidation with $75 being clear resistance. In the beginning of October, the stock broke above the $75 level and has made its way back up to the $80 level.

The Tale of the Tape: Now that XOM is back above $75, that level should act as support on any pullbacks. If that does in fact happen, a long trade at $75 could be made with a stop below that level. A long trade would also be advisable if XOM were to break above $80. If a trader is bearish on XOM and/or the market in general, a short trade could be made here at $80 with a stop above that level

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!

Good luck!
Christian Tharp, CMT