Exxon Mobil (XOM) has made a nice recovery from its August and January lows, as crude oil has firmed back up to $50 a barrel and the overall market has rallied. Is the rebound over, as new hurdles present themselves: chart resistance, the Brexit vote, the greenback firming and maybe crude oil retreating?
In this daily chart of XOM, above, we can see prices are above the rising, 50-day and 200-day moving averages. There is a bullish golden cross of the 50-day and 200-day averages in March.
The On-Balance-Volume (OBV) line turned up from the August and January lows, but the OBV has been flat since early May -- even though prices made new highs in June. The 12-day price momentum study has been making lower highs and slowing since February. This picture of slower momentum as prices move higher is a bearish divergence. This divergence can be foreshadowing price weakness, or a decline, in the weeks ahead.
In this weekly chart of XOM, above, we can see chart resistance in the $90 to $95 area. XOM has pushed up to the lower end of this resistance area. Prices are above the rising, 40-week moving average line.
XOM has a strongly rising OBV line on this timeframe, telling us that buyers of XOM have been aggressive. The Moving Average Convergence Divergence (MACD) oscillator is bullish above the zero line, but the two lines of the MACD have begun to narrow -- and if they cross it will be a liquidate-longs sell signal. With slowing momentum, overhead resistance and the OBV starting to waver, XOM could retreat a little. A pullback to the $85 area would not be a terrible development, should it occur.
