Exxon Mobil Needs to Break Out of This Pattern

 | Aug 14, 2017 | 2:28 PM EDT
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Exxon Mobil (XOM) was looking positive near the end of May: "With crude oil prices trying to firm again, we are now more likely to see XOM make an upside breakout with strength above $83.91. Aggressive traders could probe the long side on strength, risking a close below $79. A rally back to $88 is possible in the intermediate term."

Unfortunately, our forecast did not play out all that successfully. Prices declined into early June near $79 and then bounced to near $84 before declining to near $78 now. Charts that looked promising in May are more confusing now.

In this daily bar chart of XOM, above, we can see prices are below the declining 50-day moving average line as well as the declining 200-day line. The daily On-Balance-Volume (OBV) line has moved erratically the past 12 months and has risen from a June low. The recent new low in prices was not matched by a new OBV low. In the lower panel is the momentum study, which shows equal lows in price from June till now compared to lower lows in price.

This weekly bar chart of XOM, above, shows prices below the declining 40-week moving average line. The weekly OBV line is close to a new low for the move down and the MACD oscillator does not look like it will turn positive any time soon.

Bottom line: XOM needs to break the pattern of lower lows and lower highs. It may take a close above $84 to convince us that a bottom has been established.

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