Exxon Mobil Goes From Break Down to Break Out

In our September 23 review of oil giant Exxon Mobil (XOM) we wrote that “XOM and other energy names have been a sector to hide out in during the 2022 bear market. New lows for the move down in crude oil futures could generate further long liquidation in energy names despite longer-term bullish trends. In this current period of broad market weakness it may be better to do some selling and ask questions later.”

The shares did not break further to the downside and have rallied from the 200-day moving average line. Let’s check the charts again now that shares are knocking on their 52-week highs.

In the daily bar chart of XOM, below, we can see that the shares quickly turned higher from late September. XOM is only a few pennies from a new 52-week high and upside breakout. Prices trade above the rising 50-day moving average line and above the rising 200-day line.

The On-Balance-Volume (OBV) line made a shallow dip in September telling us that there was some pick up in aggressive selling but now the OBV line is close to a new high. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.

In the weekly Japanese candlestick chart of XOM, below, we can see that the shares made a successful test of the rising 40-week moving average line. XOM formed a doji pattern but price strength this week should refresh the uptrend.

The OBV line shows a long-term bullish uptrend. The MACD oscillator is above the zero line and poised for a turn higher and a new outright buy signal.

In this daily Point and Figure chart of XOM, below, we can see that a trade at $105.49 will refresh the uptrend. An upside price target of $139 is shown.

In this weekly Point and Figure chart of XOM, below, we can see a price target of $138.

Bottom-line strategy: We may not be in favor of higher gasoline prices but the charts of XOM are looking bullish and probably headed higher. Trade XOM from the long side. Our next price target is the $130-$140 area.