Exxon Mobil XOM Must Stay Above Critical Support Level
Exxon-Mobil is teetering at a critical support zone that buyers must hold… or else a monthly downside target could come into play. Price is currently in an ascending trading range with clear support and resistance levels. Let’s take a look at the weekly and monthly chart of Exxon-Mobil (XOM) to see these critical levels to watch.
Taking a look at the weekly chart, we see dual trendlines starting from the 2008 price highs and lows until present day. These trendlines intersect at the $67 per share level, which is a critically important support zone.
For now, the lower trendline rests just above $67.50, which is exactly where price ended 2009. We begin 2010 afresh with an absolutely critical price test of this all-important price support level.
Why do I define $65.00 as absolutely essential support? That’s because any move under the $65 level could start an avalanche downside move that brings into play a long-term, monthly chart target… an ominous monthly-scale bear flag.
XOM Monthly Reveals Potential Bear Flag:
Bulls are praying that this chart does not become reality, but the pattern is clear if we get a downside break.
The trendlines as seen on the weekly chart seem to form the ‘flag’ portion of a Bear Flag price pattern on the monthly chart.
Under classic technical analysis, we take the measure of the impulse (the move from $90 down to the $55 level – a $35 difference) and then subtract this to get an aggressive price target from the lower trendline which currently rests just above $65. Subtracting $35 from $65 gives us a final price projection target of $30 per share.
I prefer to be more conservative in setting targets from bear flags, which means I would subtract the $35 impulse from the upper of the flag, which currently rests above $75. Thus, I would derive a target of $75 minus $35 or $40 per share.
Either way, the monthly bear flag, if it becomes reality, does not bode well for Exxon-Mobil, oil prices in general, or the broader stock market.
Keep in mind that this is one of many ways to interpret the chart of Exxon-Mobil, but it is a possibility that needs to be monitored closely for signs of follow-through.
For my prior analysis posts on Exxon-Mobil, see the following:
August 10, 2009: Triangle Trendline Lesson in Exxon-Mobil
September 21, 2009: Symmetrical Triangle Forms in Exxon-Mobil
September 30, 2009: An Update on that Pesky Triangle in Exxon-Mobil
October 15, 2009: Update on the Triangle in Exxon-Mobil
Corey Rosenbloom
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
Hello Corey. Hope you had a good New Year. This is just based on my rudimentary technical anaylsis skills but, could that be the throwback from a breakout of that apparent triangle pattern on the weekly chart?
Also, if you placed an elliot wave count over that monthly chart could that $65 range in 2009 be the bottom of wave 4 or the beginning of wave 5?
Like your said, many interpretations. Let me know if you get the chance. It is nice to know if I am on the same page as knowledgeble people like yourself. Thanks, have a good one.
Awesome analysis. I've been stalking XOM looking for it to head lower for a while. General market euphoria kept most stocks propped up today, but we'll see what happens as we get further into 2010. I like the 40 target, especially being it's previous triple-top resistance on the monthly. Probably some hesitation around 60 as well before it can really take off.
Well, XOM is currently at 65.03, and it may be heading lower.
Is this the beginning of the end?
Well, XOM is currently at 65.03, and it may be heading lower.
Is this the beginning of the end?