Trading Idea: Momentum Building in Exxon
Published on Tuesday, 08 January 2013 08:04 Written by TradersHuddle Wire
New York, January 8th (TradersHuddle.com) - Shares of Exxon Mobil Corp. (NYSE:XOM) closed the trading session at $87.93 with its price action in a very tight range, given that calculated support is set at $84.70 and the calculated resistance is set at $89.09.
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. This signals an area where momentum is building, since the stock can resolve by breaking out of the developing tight range.
Traders wanting to establish a position should pay close attention to Exxon's price action, as any movement outside its predefined range of $84.70 and $89.09 could grasp the attention of momentum buyers that look 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 could spark above the average selling. A tiered approach could be the best way to start a position; enter into it while the stock is in the tight range, and then add to this position as it breaks and closes above resistance.