With crude oil futures getting slaughtered, the PreMarket Prep crew discussed when this trend would finally spill over into the oil sector. With that in mind, Exxon Mobil Corp XOM is Friday's PreMarket Prep Stock of the Day.
Crude Oil Futures Cave During The Show: The discussion was instigated by the steep decline toward the end of the show. In fact, the December contract, which peaked earlier in the week at $89.25, was dipping into the $70 handle for the first time since Oct. 3.
Money Mitch Makes A Call: The producer of PreMarket Prep, Mitch Hoch, initiated the discussion on the next potential move in oil stocks.
“I know Dennis [Dick] has been early on calling the top in oil stocks, but I am looking for a pullback in these issues,” he said, adding: “It may be time for an oil reversal.”
With crude cutting through the $80 level and topping patterns in many of the charts, it could be time for a much-needed pullback, he said.
Why Are Oil Stocks Holding Up So Far? That question was posed to co-host Dennis Dick and he was quick to respond.
The answer is in low price-to-earnings ratios, he said.
“Exxon Mobil has run from $90 to $114 since October. The time to buy was then and it is time to sell in November," Dick said.
“If you own, congratulations. It may be time to ring the register.”
PreMarket Prep's Take On Price Action: When ExxonMobil was being covered on the show Friday, it was already in the red by more than $1, trading in the upper $111 handle. The author of this article noted that over the last week, there have been major sellers at the $114.50 area.
Specifically, there were four consecutive highs from Nov. 11-16 between $114.26 and $114.64.
The questions posed to the listening audience: would those sellers on strength lower their offers to $113 or $112 in order to exit the issue?
XOM Price Action: After a lower opening ($110.90 vs. $113.06), Exxon continued in that direction and bottomed over a dollar lower at $109.61 and reversed course.
Exxon was trading down 0.47% at $112.43 ahead of the close.
The discussion on Exxon from Friday’s show can be found here:
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
