During the recent trading sessions stock of Exxon Mobil Corporation (NYSE:XOM) was gathering the crowd in the stock market. Many analysts use price trends and patterns to predict future performance, and we can glean some important insights about XOM by examining the chart.
How has the stock performed recently?
Exxon Mobil Corporation (NYSE:XOM) in the last month has increased +3.38%. Shares are now down -5.33% over the past year, underperforming the broad market by -130.76% and underperformed a peer group of similar companies by -133%. After the latest session, which saw the stock close at a price of $80.09, XOM sits -14.08% below its 52-week high. Exxon Mobil Corporation (NYSE:XOM) has been trading in a bearish manner, based on the relative positions of the stock’s 20 and 200 day moving averages.
Of course, these surface-level price movements don’t tell us much about the direction that XOM may be headed in the future. In order to predict this, technical analysts look at momentum indicators, which measure the speed and magnitude of these price movements. The idea is that as momentum slows, it may signal the approach of key support or resistance levels and a reversal of recent trends. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for XOM is 59.15%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 97.14%, tells a different story, and suggests that XOM currently trades in overbought territory.
What do the trading volumes reveal?
In addition to price, analysts use volume trends to predict future performance. The level of trading activity in a stock is often a good proxy for the level of interest and enthusiasm for the name within the investment community. A sudden increase in activity can be a sign that investors are trading in anticipation of a catalyst. Exxon Mobil Corporation (XOM) average trading volume of 10,203,460 during the past month is 11.09% below its average volume over the past year, indicating that investors have been less active than usual in the stock in recent times.
What do the analysts think?
XOM is currently undervalued by -2.53% relative to the average 1-year price target of $82.17 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.90, which implies that analysts are generally neutral in their outlook for XOM over the next year.
How risky is the stock?
In order to put XOM’s recent price performance into context, we need to get a sense of how the stock moves in relation to the overall market. Beta, which measures a stock’s price volatility relative to the market, provides the cleanest measure of systematic risk for a stock.
Exxon Mobil Corporation (NYSE:XOM) has a beta of 0.78, compared to a beta of 1 for the market, which implies that the stock’s price movements are less extreme than the market as a whole. XOM therefore has a below average level of market risk. During the past couple of weeks, XOM average daily volatility was 9.03%, which is 2.38 percentage points lower than the average volatility over the past 100 days.