XOM Analysis

XOM is one of those heavily weighted stocks in the Dow, number 6 to be exact.

The longterm action in XOM looks quite bad and the near term action is deteriorating.

 XOM formed a H&S top in 2011, after it broke down it easily reached the price pattern implied target of $71 and exceeded it to hit $67. It has formed what looks to be another, yet smaller H&S top recently through 2012, but in the process has created a larger top, that of a double top between the two H&S patterns, this has a much lower price pattern implied target of roughly $50; that's a big move for such a large cap.

 Here is MoneyStream, it doesn't often give signals, but they tend to be very good signals, MS is in a leading negative divergence at this second top as you would expect to see.

 Here's the long term daily (2) chart of 3C with similar findings, it shows the negative divergence in the first H&S top in 2011 and a negative divergence at the current top as well as being in a stronger leading negative divergence, much like MS above.

 The intraday 60 min chart, the strongest, most important of the intraday tops is clearly negative at the recent Head of the H&S current top pattern.

 The 30 min chart is in confirmation, both negative at the head and leading negative since.

 The 15 min chart shows a quick area of accumulation on a head fake move below support to the left at the white arrow and a leading negative divergence in to the H&S top pattern.

 This is the 2 min chart coming off the top of the right shoulder, negative at the top, showing a small positive divergence leading to a bounce that has now started to go negative, suggesting XOM will be heading lower toward the neckline.

The 1 min chart shows this more sharply.

In my experience and as you saw with the first top, downside price pattern projected targets are often exceeded, so a target of $50 may very well be quite a bit lower. This means XOM may indeed be cut in half from current levels when all is said and done. We also have to factor in the fact that the negative H&S 2011 top and the recent top have been formed during a bullish environment, what the downside target may look like in a bearish environment could very well be much uglier then what I have laid out above.

This is one that should be on your watchlist, especially if you are inclined toward longer term or trending trades.