Is Exxon Mobil a Buy on Earnings?

Exxon Mobil is up slightly after beating earnings expectations. Here's what to look for on the charts.
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For the beating that Exxon Mobil  (XOM) - Get Report has taken over the past year, bulls were likely hoping for a bigger post-earnings rally in the stock.

Shares were up less than 3% on Tuesday after the company reported its fourth-quarter earnings.

Exxon reported a profit of just 3 cents a share, although that was ahead of expectations looking for a penny a share in profit. 

However, revenue of $46.5 billion sank more than 30% year over year and missed expectations of $48.76 billion.

The report comes just days after reports circulated that the company had help merger discussions with Chevron  (CVX) - Get Report last year.

Energy was the worst-performing sector in 2020. Exxon isn't an exception from that observation, with the stock still 35% below its 2020 high. As you’ll see on the chart, it’s still down significantly even though it’s had a solid rally from the lows.

Trading Exxon Mobil

Daily chart of XOM stock.

Daily chart of XOM stock.

Exxon avoided making new 2020 lows in the fourth quarter, but it came close. Since then, it’s been trading well. Still, investors were hoping for a bigger rally on earnings, especially with the stock down 12% from its recent high on Jan. 14.

Currently, the stock is contending with the 38.2% retracement of the 2020 range and the 21-day moving average. If it can’t reclaim these marks, investors must be cognizant of where downside support is.

Below $45 and investors have to be thinking about this week’s low around $44.29. That comes into play just above the 10-week and 50-day moving averages, the latter of which is near $43.50.

If this zone doesn’t support Exxon Mobil stock, look for a possible dip down to the $40.50 to $41.50 zone. In that area, Exxon has the 50-week and 200-day moving averages, as well as notable support.

On the upside, we need to see the 38.2% retracement hold as support, then for the stock to reclaim the 21-day moving average. Above Tuesday’s high near $47 and bulls will quickly turn their attention to last week’s high, at $47.86.

If bulls can eventually gain some upside momentum, it will have investors looking at the $50 level and the 50% retracement at $50.74. Above this area opens the door the June high at $55.36 and the 61.8% retracement at $55.61.

The bottom line? Let’s watch the 21-day moving average on the upside and $45.87 on the downside.