Dear subscribers, lets come together to discuss another major oil company. NYSE:XOM
As we described in our last update "CVX - Major reversal ahead?" the situation in major us oil stocks is very exciting. Some time has passed since the collapse (february 2020) of the oil price and the massive drops in companies like Chevron or Exxon Mobil . In the past year those stocks as well as the oil price have rallied tremendously and Exxon Mobil could rise nearly 130% since it's bottom.
Like in Chevron we have spotted a very important chart formation in the Exxon Mobil, a so-called "Rising Wedge", which marks a major trend reversal according to the Elliot Wave Theory. From the image shown on the left, you can see the 1-2-3-4-5 movement and the following correction in wave II. The only minor inconvience is, that Exxon Mobil's chart structure isn't as flawless as Chevron but the situation is clearly the same.
We now have reason to believe that Exxon Mobil is in the last breaths of its rally and is on the verge of a massive price collapse. In that case, wave II could set us back to prices in the $88 to even $67 range.
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Comment
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We would like to note that we predicted this bullrun back in 2020! The elliot wave structure has changed since then but our price targets were reached.
Something to consider in the medium-long term. Russia is in the spotlight. USA seems to be talking sanctions. IF they do something absurd like this that would put Russia out of the financial markets which would make their oil more difficult to sell. That would spike oil prices over night. While that may seem like good news for Exxon (it will be in the short term) that is upward pressure on already serious inflation. Serious inflation is combatted with higher interest rates that are already in the works. Higher interest rates means the national debt and the fed balance sheet becomes more difficult to pay (which makes you wonder if they will do it at all). Higher interest rates would also likely throw us into a depression/recession. That means less oil demand. Less oil demand when supply is just catching up means a severe drop in prices again over night. I am long XOM for now but depending on all the madness that is probably about to happen it's best to be paying attention and be ready to hit the button if necessary.
rebelvolt
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I'm definitely in the camp that XOM is about to go to all-time highs. I'd say likely not until Jet Fuel demand fully returns which could be summer of '22, summer of '23 at the latest. Pretty safe bet to buy/hold or even buy/keep buying the next couple of years and collect a reasonable dividend while you wait. Could also trade short term but I believe the Coof is behind us now considering everybody is finally getting it and the trades won't be quite so easy going forward. Even the die-hards in the world are finally getting to the point of acceptance because they simply don't have a choice. This is good news for the world.
Mendenmein-Capital
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@rebelvolt, Absolutely agree with you - XOM is really an outstanding company for it's high dividend. We will continue to buy XOM/CVX shares when the expected price drop occurs, this way an excellent dividend yield can be achieved over the next years
Pistachiosdeldios
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Thank you for your work! I think there is a small mistake in the targets of the second wave, I guess they are taken from the CVX post. Should be 49$ and 38$.
Mendenmein-Capital
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@Pistachiosdeldios, Thank you for noticing this! The targets are in the range of 50$ to 38$, we will give more detailed information about our targets when we can be certain that Wave I is finished.