Current trend

Shares of ExxonMobil Corp., an American oil company, have been trading sideways since mid-May at 108.50–102.00. This week, the price actively tested its upper limit but today, it tried to decline under pressure from management’s statements about falling revenues due to lower natural gas prices and lower refining margins.

Thus, in the second quarter, operating profit amounted to approximately 7.8B, which is significantly inferior to the figures for the same period last year at 17.85B dollars, the profit of the gas divisions decreased by 2.2B dollars compared to the first quarter of this year, and from refining oil into gasoline and diesel fuel – by 2.1B dollars. Only the chemical divisions of the corporation increased profit to 800.0M dollars, which is twice as much as in the previous period. Experts believe that the negative dynamics may continue in the second half of the year against the economic crisis and a drop in business activity in the industrial sectors of China, the United States, and the EU, which, in turn, may lead to a significant decrease in energy consumption in the world’s leading economies and adversely affect a wide range of companies in the oil and energy sector.

Support and resistance

The trading instrument is close to the middle line of Bollinger bands (105.65), a breakdown of which will allow the quotes to continue falling to 102.00 (lower limit of the sideways range) and 100.00 (Murrey level [0/8]). To resume growth, the instrument needs to break above the support zone of 108.50–109.38 (the upper limit of the sideways range, Murrey level [3/8]), and then the positive dynamics will increase to the area of 112.50 (Murrey level [4/8]) and 115.62 (Murrey level [ 5/8]).

Technical indicators do not give a single signal: Bollinger bands are reversing upwards, the MACD histogram is preparing to move into the positive zone, and Stochastic is preparing to leave the overbought zone.

Resistance levels: 109.38, 112.50, 115.62.

Support levels: 105.65, 102.00, 100.00.

Trading tips

Short positions may be opened below 105.65 with the targets at 102.00, 100.00 and stop loss around 107.80. Implementation period: 5–7 days.

Long positions may be opened above 109.38 with the targets at 112.50, 115.62 and stop loss around 107.15.