In my last update for oil giant Exxon Mobil (XOM), I discussed my theory on why I thought oil prices were going to be “lower for longer”. That article can be accessed here:

“2/25/2017 – Exxon Mobil (XOM) & Lower for Longer”

In that previous update, I identified a pivot line around the $78 price level where I though it was key for XOM’s share price to find support and begin to reverse higher. This Trendy Stock Charts article will take a look at that $78 pivot area as well as any additional technical indicators that give clues to the next move for XOM’s share price.

The other item I discussed is that the $70 price level was the next support level below the $78 price level. Let’s review how these support areas are holding up.

Exxon Mobil (XOM) – Long-Term Trade

Since the February 2017 article linked above, the share price for Exxon Mobil (XOM) did indeed find support above the $78 pivot line and has since started to rebound. This is a 20 year monthly candlestick chart to confirm any longer-term trend for XOM’s share price.

Exxon Mobil’s share price found support on a very long-term main supporting trendline. From a long-term perspective (greater than 1 year holding time), any purchase made below the main supporting trendline paid off handsomely.

The gray shaded box is an area where XOM’s share price should start to find very strong support on a break below the main supporting trendline.

However, XOM’s share price has seen a rebound in buying volume when viewed from a shorter-term daily candlestick chart. It’s share price could be in the process of[s2If !current_user_can(access_s2member_level1)]……

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I look at some pullback areas to begin building a position in the stock as well as some of its upside target prices, both short and long term.

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)] developing into a longer-term bullish reversal candlestick pattern. If XOM’s share price can close at the $81.50 price level or higher at the end of June 2017, it would develop a Bullish Engulfing candlestick pattern.

XOM – Short-Term Upside

This next chart is a polar opposite of the first chart. It is a short-term 3 month daily candlestick chart. I placed a Fibonacci Extension Tool on the chart to calculate some short-term upside price targets based on its recent rebound from the $79 price level.

While the short-term chart provides for a possible continued rebound back towards the $85 price level in the next few days, the subsequent pullback is the one that should really be monitored to start looking for a possible scale-in purchase.

As seen in the next P&F Chart, there is still downside risk of 10%+ for XOM’s stock based on current share prices.

XOM – P&F Chart

This Point & Figure chart (P&F Chart) for Exxon Mobil (XOM) seems to confirm the downside risk of the $70 price area which I discussed in the February 2017 article (linked above). It reflects a bearish price objective of $70.

Exxon Mobil (XOM) – Summary

For those looking to enter into a long-term oil trade, purchasing any shares below the $80 price level is an excellent place to make your first scale-in purchase.

But based on the analysis from the February 2017 article for Exxon Mobil and the P&F Chart illustrated above, do keep in mind that there is downside risk of another 10 – 15% from current price levels. If you are considering XOM to be a long-term trade, it may still be worthwhile to have a little more patience and try to pick up shares closer to the $70 price level if possible.

However if you are tired of waiting for XOM’s share price to pullback and didn’t yet make a scale-in purchase, then consider making a scale-in purchase around (or preferably below) the $80 price level.

After the purchase, hold off from any additional scale-in purchases for several weeks at a minimum until you monitor the $78 price level for support. A break below the $78 pivot trendline on selling volume that is greater than normal will be the indicator that the move towards $70 is most likely in process.

If my “lower for longer” oil theory is going to continue playing out for the next couple of years, XOM’s share price should most likely see the $70 price area….patience appears to be the best trade at the present moment….

Good luck trading!

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