Stock of the day: ExxonMobil
21 October 2024
Let's take a closer look at ExxonMobil. As we know, energy stocks like ExxonMobil are closely tied to the price of oil, and with oil currently struggling, it’s having a notable impact on ExxonMobil’s price action. Earlier in October, we saw a positive breakout, with the price pushing above key horizontal resistance marked with red on the chart. This was a bullish sign at the time, suggesting the potential for continued upward movement. However, the situation has shifted, and now ExxonMobil is testing that very level, which has now turned into a support.
While retesting a broken resistance as a support is a natural and often healthy part of the price action, the real concern lies in oil’s ongoing weakness. If oil prices continue to falter, it increases the risk that ExxonMobil will break below this red support level. A breakdown here would indicate a false bullish breakout, highlighted by the orange rectangle on the chart, which could trigger a strong sell signal. In such a scenario, the target for a further downside would be the blue horizontal support.
For now, the key for buyers is to defend this red support level. If they fail, the entire bullish outlook could unravel, leading to a potential broader correction. The next few sessions will be crucial to determine whether ExxonMobil can hold this level or if a deeper decline is on the horizon.