Exxon Mobil Corporation (XOM) — Shares of the world’s largest publically traded integrated oil company rallied 5% on Thursday on a recovery in crude prices.
This industry stalwart has proven to be more stable than its peers in times of high and low oil prices. Exxon Mobil possesses a strong management team, and its earnings and revenues consistently outpace others in the industry.
Despite the decimation of oil prices, S&P Capital IQ Equity Research reiterated its “buy” rating on XOM stock in early November and raised its 12-month target by $6 to $96. Its analysts noted Exxon Mobil offers industry-leading returns, strong free cash flows and an attractive dividend of $2.92 per share annually for a current yield of 3.7%. They also mentioned the high-quality producer has a strong pipeline of upstream assets, and that downstream units should benefit from the large refinery capacity in the long term.
XOM stock has been in a downtrend since August 2014, when it topped at over $104. Since then, its highs have been defined by the bearish resistance line that is currently near $80. At this point is merges with the 200-day moving average. Support is at $72.50.
High-volume buying this week surpassed the prior high levels of selling, and the MACD indicator flashed a new buy signal.
Buy XOM stock under $80 with a six-month trading target of over $100 for a potential gain of at least 25%. A stop-loss order should be placed at $70 to protect against losses in the event of a further sell-off in crude oil.
