Despite strong crude oil prices, shares of Exxon Mobil (XOM) have turned lower, breaking below the 50-day and 200-day moving averages today. XOM has some support below the market in the $86-$82 area but even if support holds it doesn't look like XOM is going to contribute to the Dow Jones Industrial Average running up to 20,000 just yet.
XOM is one of a dozen stocks that Jim Cramer says could regain their former glory in the rally to Dow 20K. Read his take here.
In this daily chart of XOM, above, we entered 2017 with prices making a lower high in December vs. July. In addition to the moving average breaks noted above, the volume is increasing on the decline and the On-Balance-Volume (OBV) line has turned lower signaling more aggressive selling.
In the lower panel is the momentum study, which did not diverge in December nor so far into the new year.
In this three-year chart of XOM, below, we have a bearish setup for prices that reinforces the short-term view. Prices are testing the rising 40-week moving average line. The weekly OBV line peaked in mid-2015 and is still pointed down. The OBV line declining implies that sellers have been more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is barely above the zero line and we could see an outright sell signal in the next few weeks. We have been bullish on XOM in the past but at this point in time prices look very vulnerable to further losses. I would not count on XOM to help lift the Dow Jones Industrial Average to the 20,000 milestone.
We have been bullish on XOM in the past but at this point prices look very vulnerable to further losses. I would not count on XOM to help lift the Dow Jones Industrial Average to the 20,000 milestone.