An October 15 Update on the Exxon Mobil XOM Triangle
I’ve been watching the long-term triangle consolidation pattern in Exxon-Mobil for some time now, including the post “Symmetrical Triangle in XOM” and “Update on the Triangle in XOM“. Now that we have a change in the triangle – a potential upward breakout – let’s revisit this stock on the weekly and daily frames.
The weekly chart shows us the long-term triangle (almost two years in the making now) and the upwards price breakout that occurred this week.
Price broke above the $70 per share boundary, which gave a quick ‘scalp’ entry (to play for a quick range expansion play), and now price is challenging overhead resistance on the weekly frame as shown above.
The levels to watch include $73.00, which coincide with the 200 week SMA at $72.85 and the upper weekly Bollinger Band at $73.45.
Though not shown, the 50% Fibonacci retracement from the high to the low rests near $73.50.
Prior price resistance from the June 2009 price high exists near $74.50.
All of these will be levels either to play for, or watch to see if buyers can continue to push prices beyond them. There is little to no overhead resistance above $75.00 (until price hits the $80 area) so the pathway from $75 to $80 would be known as “open air.”
Taking a look at the daily chart, we see nothing overhead (moving averages are all beneath price currently) except the prior price highs at $71.89 and $72.35 which reflect the August and July 2009 price highs.
Keep watching these levels closely and look for signs (especially intraday) of continuation to the upside to these levels.
This could be a nasty bull trap, but there’s no way to know that in advance other than to keep a close watch on your positions and intraday structure going forward.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
As usual, great article Corey! Thank you. Looks like XOM Is following oil very closely and oil looks a little short term overbought. Might have to wait for a little pullback for an entry on XOM.
You could be very right that this is a bull trap. Looks like a job for a swing trader.
Cheers,
Dan
No volume ?
Volume has been much reduced across the board.
True, XOM's break comes on less relative volume which is not what the bulls would expect.
That's why we have to watch it closely to see if it devolves into a bull trap.
Thanks Dan!
True, XOM and Oil are closely related currently, so watching both is helpful.
This is indeed for the swing traders and intraday traders with quick reflexes for sure.
I have XOM slated to hit 74.50, 74.78 maximum, then reverse or severe consolidation. Within the triangle apex is a zig zag. If you take the length of the 2nd highest peak in the triangle and couple it to the lowest point before breakout you get 74.50. That point aligns with an upward channel resistance line and near peak triangle resistance.
The pattern is a bottom triangle. It's going up as prescribed, but won't go as high as people think as the US dollar finishes its 5 corrective waves down. Just a hair and a scratch left to go before it reverses and breaks the channel resistance dating back to March.
Marc
Corey can you please tell me if there is a triangle forming in Citigroup as well?
thanks for amazing analyiseszzz 🙂
Corey can you please tell me if there is a triangle forming in Citigroup as well?
thanks for amazing analyiseszzz 🙂