XOM: The only stock worth swinging in 2022? Hey swingers ;),
I am not going to lie. This market has been tough for swing traders and stressful for intraday traders to say the least.
The big names like SPY and DIA have been really dramatically bipolar.
There is a diamond in the rough though and IMO that is XOM.
As expected, XOM managed to breakout yesterday and today from its 2019 supply zone (see my previous ideas on XOM).
Now we are heading to another supply zone from April 2019.
Will we bounce off it? Maybe. My concerns about XOM are:
1. The RSI is quite overbought on the Daily Chart and on the 1 hour chart
2. XOM has been aggressively bullish in a bear market. It has surpassed my modelled projected highs, even when I adjust the model to review only the most recent data. (For example, today, my projected high based on 1.5 years of data was 78.39, this is where I was aiming to take profits, my adjusted high based on approx 1.5 months of data was 79, it surpassed both of them and doesn't show signs of slowing. While this is generally a good thing in my books, if I aim for the highs, knowing that it will likely outperform, that's a good thing, right? Not really, because it means that the model is close to being rejected and that signified a change in sentiment. The sentiment seems to be in the bullish direction, but I really hate when sentiment changes and I have to rework another model with backtesting, etc. and generally leads me to holding off trading for a week until I have enough data to correct and test).
So what's next for XOM?
If you're not in a position with XOM (an intraday position or swing position), I would suggest waiting to see how XOM treats this new supply zone. It is not unreasonable to anticipate a bounce off it, back down to the previous supply zone. I would long biased though. Its extremely bullish for the past 3 months and to go short is just fighting a well accepted trend and I don't advise.
The outlook for XOM on linear regression analysis is positive, both in the short term and long term, on both the 1.5 years of data and the 1.5 months of data.
To put it in perspective, my models of SPY and IWM are negative short term and positive long term on the 1.5 year, negative short term, negative long term on the adjusted data (long term means within the next 1-2 months).
XOM is the only stock that I actively track with a positive outlook across the board and has most consistency.
My plan:
I want to see retracement back to my take profit zone or the July supply zone and re-enter long.
Calls for patience :).
DISCLAIMER:
Not financial advice. Not a financial advisor. Just an ex-epidemiologist who enjoys mathematical modeling.
At the end of the day, I trade price action. I use regression analysis to plan my entries and exits and chart support and resistance levels (I find it more accurate than looking at the chart). However, its not always correct and I am sometimes wrong.
Manage your risk! Its okay to be wrong, and you will be wrong, just manage your risk and you will live to see another day. Its not the end of the world :).
My linear regression models are done in SPSS. I can't share pictures, but am happy to answer your questions.
