The XOM bomb? Caution is called for.

Click on chart for larger image

Exxon Mobil, NYSE:XOM, trades on the New York Stock Exchange. Its closing price (Monday 27 July 2009) was $72.75.


I believe it would be wise to be cautious going into further long positions for the time being. XOM may be completing a fourth wave (at letter E in the chart above). Note the appalling state of the 30 week simple moving average.

This may well be an outstanding example of the ending of the global bear market rally which started last March. The rally has been so strong that I think it might surprise on the upside in the near term. But I would advise getting ready for a reversal.


If XOM's price begins to drop, there is a distinct possibility it will travel to the $52.00 region which would be about the midpoint of the downward sloping channel marked on the chart.


XOM's price may well take a breather at the $52.00 mark to gather steam, and then head on down to the $40.00 and below area.





All the best to one and all!

James Leo Donoghue
leo_donoghue@yahoo.com.au