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ExxonMobil Corp. Current Decline may not Last Long

12/6/2022 4:17 PM

Shares of ExxonMobil Corp., an American oil company, are moving within a long-term upward channel. For several weeks, the quotes tested their upper limit but failed to break through higher, and yesterday they corrected to the area of 106.25 (Murrey's level [5/8]).

Pressure on the price was exerted by two main factors: Saudi Arabia's change in selling prices for hydrocarbons against the backdrop of low demand and the likely continuation of the "hawkish" course of the US Federal Reserve in monetary policy. On Monday, the Saudi authorities announced an adjustment in the oil cost exported to Asian countries (mainly China) by –2.20 dollars per barrel, the lowest figure in the last ten months, while raw materials sold in the EU fell by 1.80 dollars per barrel. Also, investors fear that after the publication of strong November employment data in the US, the US regulator may abandon plans to slow down interest rate growth, as the economy has not yet been stabilized, and prerequisites for rising inflation persist.

The current decline in prices is seen as temporary, as the company maintains long-term prospects for increasing profits: it may be positively affected by the introduction by the G7 countries of the maximum price level for Russian oil supplies at 60.0 dollars per barrel. Official Moscow has previously stated that it will stop working with states that support restrictions, and if these threats are carried out, ExxonMobil Corp. can occupy the vacated part of the market.

The trading instrument is testing 106.25 (Murrey's level [5/8]), the breakdown of which will give the prospect of further decline to 100.00 (Murrey's level [4/8]). The key "bullish" level is 112.50 (Murrey level [6/8]), consolidation above which allows the price to rise to 118.25 (Murrey level [7/8]), 125.00 (Murrey level [8/8]).

Technical indicators do not give a single signal: Bollinger bands are horizontal, Stochastic is approaching the oversold zone, which indicates the possibility of a reversal upwards, and the MACD is decreasing in the positive zone.

Resistance levels: 112.50, 118.75, 125.00. | Support levels: 106.25, 100.00, 93.75.

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