Energy names like Exxon Mobil (XOM) have been bottoming since late August, and that process is still ongoing. While many believe that energy names trade in lock-step with daily crude oil futures jiggles and weekly storage statistics, stocks actually are much more forward-looking.
In this one-year daily chart of XOM, above, we can see the sideways trend for XOM since early August. Despite nearby oil future breaking below the $40 level, a new low for the move down, XOM shares are still above their August and September lows. XOM is back below its 50-day and 200-day moving averages, but the On-Balance-Volume (OBV) line is still holding an upward slope. XOM's most recent sell-off is likely to create a bullish divergence versus the decline in early November.
This longer-term chart of XOM, above, gives us mixed signals -- prices failed and turned down from the declining 40-week average. The OBV line is holding up and the Moving Average Convergence Divergence oscillator is still moving up for an eventual cross of the zero line. We still favor the long side of XOM, but a sell-stop around $70 would be a good idea to cut losses.
Dec. 7, 2015 | 1:120 PM
Soda Stream Loses Its Fizz
- If there is an oversold price bounce it is not likely to travel far nor be sustained.
Looking at the latest chart of Soda Stream International (SODA) (below), we fail to find any fizz in the indicators and chart patterns.
In this chart of SODA we can see prices trading sideways around $20 before a rally failure in June started a decline to the $15 level. Prices have been stuck at this level for the past three months. Since a late August low, prices have traded back and forth around $15, crisscrossing the 50-day moving average. The On-Balance-Volume (OBV) line has been flat and the momentum study has not given us much to work with. Maybe more CO2 is needed.
This longer-term view of SODA, above, shows a long and deep decline with little to suggest a turnaround. The downtrend is persistent and the On-Balance-Volume (OBV) line is suggesting more liquidation by longs. If there is an oversold price bounce it is not likely to travel far nor be long sustained.