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Exxon Mobil Corp. (XOM) was recommended early in the month as one of The Most Oversold Dow Stocks and has stayed in a narrow range for most of the month. It currently yields 2.6%.
- XOM has rallied from a low of $87.90 over just a few days.
- The trend line resistance, line a, is now at $90.60 with the January high at $91.93.
- The relative performance has just moved above its WMA but is still well below its downtrend, line c.
- The on-balance volume (OBV) has reached support at line d and has now turned higher.
- It needs to move above its WMA to confirm that the correction is over.
- The October high was $93.67 with the 2008 high at $96.12.
Halliburton Co. (HAL) has formed a flag formation, lines e and f, since the February 14 high at $43.96.
- The correction has tested the 38.2% Fibonacci support from the November lows, which is at $38.52.
- The monthly pivot support for April is at $38.43 with the 50% retracement support at $36.85.
- The relative performance has dropped back to test its breakout level (line g) after confirming the recent highs.
- The daily OBV is also retesting its breakout level at line h.
- The daily downtrend is at $42.10 with further resistance at $42.64.
- The 127.2% Fibonacci projection target is at $45.37.
What it Means: The completion of the trading range in the stock market has not been confirmed by all the market averages or technical studies. It could be this week, but it is also possible that we will move sideways to lower for a bit longer.
I recommended several stocks in the energy sector earlier in the month, and it still seems most likely to lead the next market rally and now looks attractive for new buying.
How to Profit: For the SPDR S&P Oil and Gas Exploration ETF (XOP), go 50% long at $60.24 and 50% long at $59.48, with a stop at $57.25 (risk of approx 4.3%).
For Exxon Mobil Corp. (XOM), go 50% long at $89.66 with a stop at $86.86.
For Halliburton Co. (HAL), go 50% long at $39.72 and 50% long at $38.62, with a stop at $36.92 (risk of approx. 5.6%).
Portfolio Update: Should be 50% long Exxon Mobil Corp. (XOM) at $88.66 with a stop at $84.19. Cancel the order to add at $87.82.