LiteForex - Analytics

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    Analytical review for Exxon Mobil Corporation's shares on 25.02.2016

    Exxon Mobil Corporation, #XOM [NYSE]
    Commodities, Oil&Gaz, USA

    Financial performance:
    Index –DJIA, S&P 500; Beta – 0.85;
    Capitalization - 339.36 В
    Assets profitability - 4.70%;
    Revenue 16.15B; Average volume – 18.48 М;
    P/E - 21.17; ATR – 2.19.

    Analytical review:

    • The Company has the 1st biggest capitalization in the commodities sector among the issuers listed on the US stock market.
    • The company's main activity is oil and gaz production in various regions. Lately, there has been a crisis of confidence among investors in the oil-producing sector due to the commodity price collapse.
    • A t the beginning of February, the Company provided a report on the 4th quarter 2015. According to the Company's press release, its net profits dropped by 58% to 2.8 billion USD over the period under report. The EPS fall amounted to over 57%, from 1.56 USD to 0.67 USD;
    • At the press conference, the company's management announced that the revenue had dropped by 35% down to 268.8 billion USD in 2015. The company sold $785 million assets over the period under report. Exxon plans to decrease capital investment by 25% to 23.1 billion USD;
    • The S&P rating agency plans to downgrade the company's credit rating. As a result, Exxon may lose the AAA rating.

    Summary:

    • Oil quotes are not expected to recover significantly in the nearest future. Saudi Arabia and Iraq announced that they were not going to cut oil production and lose any markets. According to the Energy Information Administration, the US oil reserves grew by 3.5 million barrels last week. The results of the latest report will have a negative impact on investors' confidence in the Company's management.
    • Thus, we expect that the company's quotes will be falling in the nearest future.

    Trading tips for Exxon Mobil Corporation's CFDs

    Medium-term trading: the issuer is trading at the range of 81.60-83.25USD. Once these levels steady and relevant confirming signals appear (PriceAction patterns, for example), we recommend searching for market entry points to open short positions. Risk per trade: no more than 2% of equity. Stop order shall be placed at 83.15 USD. We recommend that prospective profits should be fixed partly at the levels of 79.80 USD, 77.70 USD, and 75.30 USD, with Trailing Stop applied.

    Short-term trading: On the 15M time-frame, the issuer is currently trading between the local support and resistance levels of 79.75/81.80USD. We advise you to search for market entry points once these levels are broken and tested. Positions shall be opened in the direction of the signal line and the nearest support/resistance level. Risk per trade: no more than 3% of equity. Stop Order shall be placed a bit above the signal line. Prospective profits shall be fixed partly, at 50%, 30%, and 20% of a prospective fluctuation, with Trailing Stop applied.


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