Shares of Exxon Mobil Corporation (NYSE:XOM) had a nice start to 2018 and by so doing reached a first important upside price target. In the longer time frames, however, XOM stock may just be starting a big picture breakout move.
Thanks to the early-2018 rally, the high-$80s price target has now been reached and the stock is taking a much deserved breather at a technically important juncture.
Exxon Mobil is scheduled to report its next batch of earnings on Feb. 2, which likely is the next date to circle for any meaningful moves in the stock.
XOM Stock Charts
Moving averages legend: red – 200 week, blue – 100 week, yellow – 50 week
On the multiyear weekly chart, we see that thanks to the year-to-date rally XOM stock has now once again reached the diagonal resistance line from the 2014 highs. In fact, my last trade idea on Dec. 26 was all about making a trade toward this technical resistance area.
But if we look a little closer, we see that despite the setback from the 2014 highs, the larger picture up-trend has remained all along. The weekly MACD momentum oscillator at the bottom of the chart, meanwhile, is also perking back up. In other words, XOM stock here is taking a breather but from a trend perspective the odds are favorable for a continued move higher.
Moving averages legend: red – 200 day, blue – 100 day, yellow – 50 day
As an important side note, energy stocks such as that of Exxon Mobil are highly correlated to the price of oil. As such any major bearish reversal in the price of oil would likely also serve as a head wind for this stock.
On the daily chart, note that the breakout that occurred in early January came out of a so called ‘inverse head and shoulders pattern’ and also pushed XOM stock back above the blue zone marked on the chart. The diagonal resistance line the stock has arrived at on the daily chart also matches up with the bigger picture diagonal resistance line from the chart above.
In other words, XOM stock in the high $80s has reached a critical technical juncture. If and when the stock can comfortably trade and hold above the $88 area, then a move into the mid $90s could get underway.
— Serge Berger
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Source: Investor Place