Exxon Mobil (XOM) was unable to make a sustained move above $84 in June and July, and has weakened so far this month. Further weakness is anticipated in the short-run but this is within a longer-term decline on the weekly chart.
Despite an attractive dividend I am not looking to buy weakness in XOM in the weeks ahead. Let me show why I've come to that conclusion.
In this daily bar chart of XOM, below, we can see that it took only two months for XOM to skid from above $88 to below $73. XOM crawled higher the next four months and could only get back to $84 - selling pressure was much more concentrated and stronger than the buying.
Prices are below the declining 50-day moving average line and the weak/bearish 200-day line.
The daily On-Balance-Volume (OBV) line has been weakening from February and did not respond much in a positive way as XOM rallied from April. A weak OBV line suggests that sellers of XOM have been more aggressive and that prices are likely to stay weak.
The Moving Average Convergence Divergence (MACD) oscillator is now below the zero line in an outright sell.
In this weekly bar chart of XOM, below, we can see that prices have been weak since the middle of 2016. XOM is below the declining 40-week moving average line.
The weekly OBV line did improve a little from March of this year but now looks to be rolling over again.
The weekly MACD oscillator looks poised to cross to the downside and the zero line.
In this Point and Figure chart of XOM, below, we can see a small downside price target of $75.19. Weakness below $74.46, however, could precipitate even further selling.
Bottom line strategy: If XOM declines to $75 (as per the Point and Figure chart) it puts it close to a retest of early April low at $72. When I look at the weekly chart I don't have a reason to want to buy that anticipated weakness.