XOM II

As explained in my previous post on this stock, there has been considerable sideways movement under continued strong earnings and so the value catch up component alone is a strong argument in favour of this stock. In addition, with the acquisition of a major domestic natural gas stake management exhibits a strong grasp on future opportunities and a willingness to adjust their operational practices.



From a charting perspective you'll see that comparable to the retrace following the burst .com bubble (of about 30%) we are currently adjusting for the most recent bubble. In fact after an exact retrace to .68 of the all time high we have refound our footing along the long-term trend line that seems to carry the stock's fundamental value. Based on this view the stock is healthy, neither severely oversold (which would suggest operational hurdles of some sort) nor overbought. It will, however, need to prove itself on top of this trend line to continue to deliver the kind of strong performance it has shown for most of this decade, otherwise the languish it saw early on in the decade will ensue once again. Since spring is historically a strong time for the stock watch for it to establish itself above the trend.