Monday, May 24, 2010

XOM at the Gate

I mentioned XOM in conjunction with my XLE study last week. This week's gyrations have put XOM in a potentially attractive buying position. The chart above shows the weekly bars with my arbitrary view of long term support and resistance. XOM has been riding this channel since October 09 when it managed to span the entire channel width in a single week . . a not-inconsequential accomplishment. At that time the VIX was also running in the mid-40s.
Below is Project Z's take on XOM as of Friday mid-day . . a trade signal to exit a short position in effect since 4/27. This is NOT is BUY signal but simply a short cover signal. The outlook for XOM and oil as a sector still has a cloud over it, but if oil starts to display some traction, this looks like a good bet.
Over the weekend I watched a video Don Worden on Telchart put out explaining his feelings about likely market direction. He's not bullish . . and views the year long run up as mostly a temporary reversal of a longer term downtrend. He bases most of his argument on the strength of the MoneyStream indicator, a proprietary tool of Telechart that does have a pretty good track record. While he sees the potential for some additional short term upside, the longer term picture is lilely down. This is just one man's view of the markets but, based on Don's 35 years of tracking the markets, it's worth a consideration.
My old trading buddy, The Clueless One, is also a follower of Telechart and has a much more detailed exploration of the current MoneyStream (MS) situation.

1 comment:

Cucca said...

I could sucker for XOM, the only gripe I've always had with them, and Da Udders in that group, is the lousy dividends they pay, geeze, with all that money they make reward your share holders XOM!!!
I didn't see that video by Worden, I have the gold package, I, ALMOST, quite them this weekend, as I have another service I've signed up for, but it wasn't worth the rebate. I do like his MS and especially the TSV, is seems to work for me.