Exxon Mobil Corp. (XOM:NYSE)
Price at Preparation: $108.38 (Mar 8th, 2024)
What they do
Exxon Mobil Corp. (XOM:NYSE) engages in the exploration, development, and distribution of oil, gas, and petroleum products. It operates through the following segments: Upstream, Downstream and Chemical. The Upstream segment produces crude oil and natural gas. The Downstream segment manufactures and trades petroleum products. The Chemical segment offers petrochemicals. The company was founded by John D. Rockefeller in 1882 and is headquartered in Spring, TX.
At Theta Bandits, we are always looking for assets on the move that could provide enormous potential for a nice return. Today’s pick is Exxon Mobil Corp. (XOM) and while we are a little late to the game for the start of the run, we still believe there is more in the tank – let’s have a look.
Opinion
Exxon Mobil Corp (XOM) is one of the large-cap oil stocks on the NYSE. While there has been a drive for clean energy through wind, solar and nuclear – the current infrastructure in place is not built-out to completely replace the use of oil. Referencing the chart below, note that XOM has completed their ER for Q4 2023 and has paid out their quarterly dividend of $0.95 USD / share, which is a respectable 3.43%. After the current run-up from the brief consolidation period, analysts have an average 12-month Price Target (PT) of $124.36 USD (14.78%) with a maximum PT of $142.00 USD (31.06%). The minimum PT is $105 USD (-3.09%), which yields a decent risk /reward on holding the stock at today’s price.
Plan
As mentioned above, use the chart below as a visual guide. XOM hit a 52-week low of $95.77 USD toward the end of January 2024 and had a quick recovery to the $102 USD zone where the stock consolidated. The key support /resistance lines that have been identified are $100.87, $105.70, $109.37, $112.02, $114.60, $118.82 (all USD) with any price action above being just gravy. Notice the break-out from consolidation and the resistance line was breached for the price to continue up to the next resistance zone. Expect volatility around each support/resistance zone as the price tries to move through one zone to the next. Looking to the left on the chart, we identify a “gap to fill” to the upside, we are currently starting to fill the gap so I would target the exit range to be between the $114.60 and $118.82 support/resistance zones. As always it is prudent to scale out of the position securing profits along the way, these levels should match your plan created before taking the position.
For more content consider our Theta Bandits Discord community, a hub for traders to ask questions, share ideas and strategies for various tickers daily. Traders in this community could potentially attack purchasing this position using other methods discussed in previous Top Pick Tuesdays.
RISKS
XOM’s break-out has been fast-paced and is moving through the identified levels nicely, however it can move just as fast to the downside. Make sure to plan your trade to give it the time it needs to be successful, while setting and updating limits to mitigate risk and set exit points for the position as necessary.
Disclaimer: This article is for informational and educational purposes only, not investment advice. We recommend researching and consulting with a financial advisor before making investment decisions. All actions based on this information are at your own risk.
