THINKING OUT LOUD

Exxon Mobil – Lower High’s and Lower Low’s

February 12, 2020
by Rob Zdravevski

This is a weekly chart of Exxon Mobil’s (XOM) stock price over the past 5 years.

XOM weekly

Preceding & during the decline of its stock price, XOM had its fundamental concerns about its growing debt levels, slowing free cash flow, waning reserves and a lack of new production development.

It’s a classic case of “lower highs” and “lower lows”.

The trend hasn’t been broken until the price broke above the higher downtrend line.

The highlighted rectangle in the chart below (around the $84 mark) is where it needed to trade for a week or so for an increase in probability that the trend is reversing, confirming & perhaps strengthening.

Alas ! It didn’t break that line, instead it resumed making “lower lows” until it bounced along its 2015 support level of $67.

The recent break below this doesn’t bode well.

While the U.S. stock market makes all-time highs, XOM’s stock price is now flirting with its 10 year low and and now $56 becomes the next major support. Failing that, we look lower towards the $44 mark.

XOM Monthly

Today, the stock price is oversold on weekly basis and a lurch lower will register a very rare monthly reading.

Without much review of their valuations, fundamentals and prospects and unless the company is “broken”, trends do come to an end.

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