Like many energy names, Exxon Mobil (XOM) hasn't done much since April, but the stock has been fighting back in recent weeks and it could be getting ready to make new highs. First, let's recognize how significant Exxon Mobil is — despite the S & P 500 being dominated by huge growth names. XOM has a $510 billion market cap, which makes it the 16th biggest company in the index.
It's also the only energy name within the index's top 25 holdings. Chevron currently is No. 26 with a market cap of $283 billion.
In other words, XOM is nearly double the size of the index's next biggest energy component. XOM is within 7% of its 52-week high of $123.75 from April 12, which also is its all-time high.
Of course, we care most about the stock's chart prospects. Admittedly, the daily chart isn't overly appealing right now. The stock has remained close to its just-mentioned highs, but it has been unable to capitalize on any rally attempt over the last few months.
This has been frustrating for traders who have anticipated a better outcome. However, that same volatile trading range since April has become part of a much larger potential bullish pattern — which is best seen on this weekly chart. In fact, if we frame the price action from the spring of 2023 to now, we get a large potential bullish inverse head-and-shoulders formation.
To be clear, this formation is not completed yet; a breakout through the neckline near $123-$124 would need to occur first. If that happens, it will trigger the $150 price target. Now, let's zoom way out now.
This is a quarterly chart going back 50 years. From this perspective, XOM has broken out from multiyear bullish patterns five prior times. The last happened in 2004 and led to strong price action through early 2008.
The stock then tried to bust through that 2008 high six years later in 2014, but it ultimately failed. We had to wait until 2022 for XOM to finally reclaim that zone. The area shaded in yellow is the same bullish pattern highlighted above.
In other words, a breakout to new highs now finally would help extend the 14-year bullish pattern breakout (2008-2022). Of course, XOM is beholden to crude oil's future path. And while the odds are low for XOM to completely separate itself from the commodity, the stock has been forming a bullish chart pattern vs.
crude since late 2022. The best-case scenario, then, would be seeing XOM breakout on both an absolute and relative basis. XOM reports earnings next Friday, Aug.
2 . To be sure, technicals can never predict what a company's financials are, but we now know what's at stake from a chart point of view. DISCLOSURES: None.
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