Playing the Momentum Building in Exxon

Published on Tuesday, 07 February 2012 07:36 Written by TradersHuddle Wire

New York, February 7th (TradersHuddle.com) - Shares of Exxon Mobil Corp. (NYSE:XOM) closed the trading session at $85.75 placing the price action in a very tight range, given that calculated support is set at $83.19 and the calculated resistance based on an algorithm of peaks and troughs is set at $86.21

Exxon Mobil Corporation (NYSE:XOM) operates petroleum and petrochemicals businesses globally. The Company's operations include exploration and production of oil and gas, electric power generation, and coal and minerals operations. Exxon Mobil also manufactures and markets fuels, lubricants, and chemicals. The biggest U.S. energy producer was founded in 1870 and is based in Irving, TX.

Exxon's stock price action indicates that both sellers and buyers are materializing very close to each other, which is indicative to a momentum building area, as the stock can resolve by breaking out of the tight range that developed.

Traders wanting to establish a position should place close attention to Exxon's price action, as any movement outside its predefined range of $83.19 and $86.21 could grab the attention of momentum buyers, looking for a big movement in the price of the stock. Traders need to be aware that tight range resolution works both ways, hence, a move below support at $83.19 could spark above average selling. A tiered approach can be a good way to approach starting a position in Exxon's, by establishing a starter position while the stock is in the tight range, and then adding to the position as it breaks and closes above resistance.