Energy Investing - Oil Chart Evaluation 6/27 and Sell Mention XOM - Energy Investing - InvestorVillage

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Msg  335609 of 361638  at  6/27/2021 10:20:24 AM  by


The following message was updated on 6/27/2021 10:33:10 AM.

Oil Chart Evaluation 6/27 and Sell Mention XOM

OIL made yet another new 33-month intraweek and weekly closing high and closed on the high of the week, suggesting further upside above last week’s high at 74.25 is expected to be seen this week. Oil has reached a very important pivot point on the weekly closing chart at 74.17/74.34, which is a where a double top that was built in 2018 exists and that if broken, would open the door for a rally to the $80-$85 level. This area of resistance actually goes all the way back to 2006 and during this entire time has been strongly pivotal on 3 different occasions. In looking at the monthly chart, Oil has moved straight up over the past 9 months from the $35 level (meaning it has more than doubled in price) and the probabilities do favor the bears as this is a level that requires strong positive fundamentals to break. Using the daily closing chart, a close below 73.06 would tilt the edge back to the bears, while an intraweek rally above 76.80 would give control to the bulls. Probabilities favor the bears
XOM Sell Mention

XOM Friday Closing Price – 64.66 

XOM is a stock that has been in a downtrend for the past 7+ years, from a high 104.76. The downtrend became a “runaway freight train” to the downside 16 months ago when it broke an established weekly close support at 67.49 and fell down to 32.62 (based on a weekly close), a low that was made 8 months ago. Evidently that level (around $32.50) was determined to be a bottom and the stock has since bounced up by doubling in price. Nonetheless, the 200-week MA, currently at 66.11, is a line that has been in place for the past 6 years, determining that the stock continues to be in a bear market though a bottom to that bear market has been determined. As such and in order to break this MA line and establish that the downtrend has ended and a bull trend has started, the stock needs to break that MA line, has to generate a confirmed weekly close above 67.49, and more importantly, oil has to break its strongly established resistance around the $75 level. All possible but not likely to occur. 

XOM closed on the high of the week and further upside above last week’s high at 64.93 is expected to be seen. The MA line is at 66.11 and likely to be reached this week due to the strength seen in Oil and the stock last week. With the 67.49 level (on a weekly closing basis) a very important and pivotal resistance line, the risk ratio is clearly defined and small (around $2 per share). 

As far as the potential profit to be made, XOM shows some recently established weekly close support between 53.08 (previous multi-week high weekly close) and 55.57 (most recent low weekly close of some consequence). As such, the downside objective is a drop down to somewhere in that area. This suggests a trade that offers about a $2 risk ratio and a $10-$12 potential profit. 

Sales of XOM above 66.00 and using a 67.59 stop loss (based on a weekly close) and having a $55 downside objective will offer a 5.5-1 risk/reward ratio. My rating on the trade is a 3 (on a scale of 1-5 with 5 being the highest). 


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Msg # Subject Author Recs Date Posted
335624 Re: Oil Chart Evaluation 6/27 Long Term Idiot's Oil Chart Petroeng 6 6/27/2021 12:48:10 PM
336755 Re: Oil Chart Evaluation 6/27 and Sell Mention XOM Luckyone581 20 7/2/2021 12:10:49 PM

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