2/25/2017 – Exxon Mobil (XOM) & Lower for Longer
"Lower for longer"....that has been the oil mantra that has been in place ever since the "black gold, Texas tea" liquid was under the $30 per barrel mark. Sorry for the Beverly Hillbilly's reference, but I just couldn't help myself.
Since then oil has rebounded, almost doubling off its lows. But is oil at above $50 and closer to $60 sustainable? And at what cost do companies need barrels of oil to be in order to maintain their profitability? As automobiles continue to advance with the newest technologies, they have also become more fuel efficient. The greater fuel efficiency though has been typically offset by the increasing number of vehicles on the roads.
Building pipelines and decreasing regulations, that sounds like a ripe environment for increasing oil production here in the United States. What does increasing supply do to the oil market and prices? Ample supply helps to keep prices low. Making people "feel" richer always helps by keeping price at the pump low. Let's see if the newly elected POTUS agrees.
Exxon Mobil (XOM) - 20 Year Chart
Let's start big with Exxon Mobil (XOM). This 20 year chart has a long-term trendline that begins in 1996 and is just off the left side of the chart. This is XOM's main supporting trendline. Unfortunately, Think or Swim only shows 20 years of chart history so I cannot show the beginning of the trendline. As of the close of the market on Friday, Exxon Mobil's share price sits right on that 20 year trendline.
Approximately $3 below XOM's current share price of $81.08 is a $78 pivot line. Look for initial support around the….
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