Historical Price Action in Exxon Mobil
Not since the days of the financial crisis in 2008, have shares of Exxon Mobil (NYSE: XOM) experienced as explosive up day as the one occurring in Monday's trading.
Of course, the moves in 2008 were in response to overall volatility in an unstable market. In contrast Monday's move was precipitated by an upgrade by one of Wall Street's most respected firms, Goldman Sachs Group. An analyst at the firm upgraded the issue form Neutral to Buy and raised the price target from $96 to $109.
At this time, XOM shares are in full break out mode since eclipsing the former all time high (96.25) at the opening bell. The issue has catapulted through the $96, $97 and $98 handles before finding temporary resistance at $98.88. Since making the high after 10:00 AM, the issue has retreated to 97.42 before resuming its rally.
Interestingly, just about one month ago, the world's best known investor, Warren Buffett, disclosed in his most recent 13-F filing he had accumulated a huge position in the blue-chip energy giant.
At that time, it was a $3.45 billion position, dictating that it was a move by the “Oracle of Omaha” himself. The immediate reaction the announcement was favorable, as the issue moved up from $93.22 to $96 within the next few days.
That level coincided with the all time of $96.12 in May of 2008. After failing at the level on its first attempt, XOM drifted back to the level where it was prior to the Buffett announcement ($93).
Since that time, the issue did make a new all time at $96.25, but was not able to close above the $96 level to confirm another leg up. That was until the Goldman upgrade Monday morning. The issue, which may have been held down by huge institutional orders at $96, opened at $96.28 (less than one point higher), declined only 0.15 cents and then exploded, sending shorts scrambling for cover.
Perhaps XOM shares are playing catch-up to its peers in the sector. Such as Chevron Corporation (NYSE: CVX), that surpassed its May 2008 high (104.63) in December 2012 and added another 22% during the 2013, peaking at $127.83 in July. A similar move in XOM, would take the issue well beyond Goldman Sachs' target of ($109) to $115.
For patient investors, looking to enter a long position but do not want to chase the issue, may want to wait for a similar move that occurred after the Buffett disclosure.
In other words, wait for a drift back towards the former resistance level at ($96), which may provide major support, to begin a build a long position in a company recently endorsed by Warren Buffett and Goldman Sachs.
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