Dec
14

Added Exxon (XOM)

xom

XOM is down 4.26% in reaction to its acquisition of XTO. The stock is trading down to its 200 day SMA and I like the idea of buying a position here. It is similar to XLU and SO in that I believe it is a good retirement account position. The stock is at $69.7 and even during the crash it only traded down to $60. It is hard to imagine it going below $60.

In the immediate term, the stock is likely to find support at the 200-day SMA especially because the stock is approaching an oversold state (RSI = 30). In a 0% interest rate environment, the 2.3% yield is attractive.

To protect against stop overruns (a big fish pounding the stock through the 200 day SMA causing another sell off), I’m using a generous 3x ATR (average true range) stop at about $65.5.

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  • Must admit I am surprised you entered a position trade here. Lot's of "TV Talk" of $65 oil. Professional traders [50% of the market] are eyeing the cluster support at 58.32. We are likely to test the 30's again if the bulls cannot defend that area. But that's what stops are for, good trading CC!
  • I'm not expecting a big move in oil right now in either direction. Goes along with my theme that we are also very used to big moves up and down but not range bound action. It doesn't mean big trend moves won't continue, but I'm expecting a more stable dollar in the near term which increases the probability of oil being a little bit more stable.

    Let's see if XOM holds the 200 day. It is parked right on top of it as I type this.
  • tbird2252
    Agree w/XOM purchase...Also took a position yesterday...Early Christmas present, IMHO!
  • With the market trading slow, I've found myself moving towards some of the more boring picks such as XOM.
  • branthammer
    XTO is a great company. This will more than likely workout for XOM.
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