Exxon Mobil Corporation Investors Praying For A Hold Of Support

Exxon Mobil shares have been participating in the market's upside over the last several years. However, as evidenced by its current position well of the highs, it marches to the beat of its own drum.

Exxon Mobil Corporation XOM is widely accepted as the ultimate proxy for the major integrated oil sector. That sector has been and currently still is tied very closely to the price movements in crude oil.

With crude's price moves becoming more muted recently as a result of the increased efficiencies of the shale process, Exxon Mobil's trading range has become more compressed. Where might crude – and Exxon – be headed in the near future? Let us take a look at Exxon first and then what the influence of crude oil might be going forward.

The bullish view of Exxon Mobil…

The bulls in Exxon Mobil see a company in the leadership position in their sector – for better or worse. If crude is flying high, the entire energy sector – which would be led by Exxon Mobil – would likely be flying high as well.

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The bulls also see Exxon Mobil as a true value play with its price-to-sales of 1.06, its price-to-book of 2.32, its enterprise value trumping its market capitalization and a PE ratio of 13. The bulls also are in love with Exxon's massive positive cash flow and 2.8 percent forward dividend rate.

Technically, the bulls latch on to the fact that Exxon Mobil's stock is still in a long-term uptrend despite the short-term weakness on display this year.

What the bears are seeing…

The bears in the Exxon Mobil space would point to the very conspicuous lagginess in the stock recently and the real possibility of a further technical breakdown if near-term support does not hold up.

Additionally, the bears point to Exxon Mobil as being a relatively heavily levered company with a current ratio under 1.0 and $21.76 billion versus only $6.08 billion in total debt. Finally, the bears are salivating at the prospect – if not outright likelihood – of lower crude prices in the near future. If those lower prices come to fruition, Exxon will almost certainly come under pressure simultaneously.

What do the charts tell us about Exxon?

The chart of Exxon Mobil reveals that the stock could very well be in the early stages of a “c” wave of an “abc” downside corrective move. If this is the case, the stock would likely move down to the wave “c” target at $93.37.

The shorter-term support comes in at the recent lows of $97.95, however. Technicians would advise sellers to use any bounces to near $100.31 as opportunities to sell and would advise buyers to try to enter their trades down at $93.37.

Overall…

With the current pressure on crude oil and the likely correlation with Exxon Mobil, it looks like those long of Exxon Mobil shares will have to endure some further underperformance in the short-term.

Prospective buyers of the stock should be happy with the opportunity to get long of the stock at more attractive prices.