ExxonMobil reclaimed a level of resistance after Donald Trump's presidential win last week. Is now the time to buy Exxon stock?
Energy stocks including oil drillers and natural gas and oil services providers may benefit from president-elect Trump's second term. ExxonMobil is one to watch as Trump looks to be more friendly on traditional oil and gas production, with his "drill, baby, drill" campaign slogan.
ExxonMobil stock climbed after Trump's victory and is forming a new flat base.
As with other oil stocks, Exxon will rise and fall with crude oil prices. So even when Exxon looks good based on fundamentals, crude oil prices may suddenly plunge, taking ExxonMobil stock down, too. On the other hand, a rise in oil prices may help lift the stock.
Crude oil prices have improved from September lows. The average price of gasoline across the U.S. on Wednesday was $3.08 per gallon vs. $3.37 one year ago, according to AAA data. West Texas Intermediate oil prices rose to $68.28 a barrel on Wednesday .
Oil prices have been on a downtrend since April's peak with a low in early September. Recent factors such as rising U.S. crude inventories and a drop in China imports helped pull down crude prices this week.
Looking forward, the new Trump administration's goal to boost oil production and tariffs on Chinese imports may send oil prices lower. But the new administration may also enforce stricter sanction to oil-producing nations such as Iran and Venezuela.
Trading Economics forecasts crude oil to be $71.56 per barrel at the end of the year and $74.80 in 12 months.
Trump Bump Lifts Exxon Stock
On Nov. 5, once Trump's victory was known, Exxon pierced an all-too-familiar resistance level around 120. Shares also reclaimed their 10-week moving average.
The stock remains is in a buy zone up to 126.53 from a 120.50 buy point. According its MarketSurge chart, Exxon also is forming a new flat base with a 126.34 entry, which is also its 52-week high.
The energy stock's relative strength line has been on a two-year downtrend, which shows persistent weakness vs. the S&P 500 Index. Its Investor's Business Daily Relative Strength Rating is a weak 54.
ExxonMobil Reports Mixed Results
The oil giant topped third-quarter earnings estimates but missed sales estimates on Nov. 1. Its quarterly earnings dropped 15% on sales that dipped 1%.
Current forecasts show fourth-quarter profit dropping 28%, followed by declines of 10% and 8% before increasing 9% in the third quarter of 2025.
Sales are projected to rise 5% in Q4 then slip to 3% growth then decrease 6%, before leveling out. Analysts lowered their 2024 EPS expectations to $7.96, or a 16% drop, with a bump to $8.06 in 2025,
Is ExxonMobil Stock A Buy?
The bottom line: ExxonMobil stock is in a buy zone, so it is a currently a buy. But investors could wait for it to break out of its current base. And watch for a drop below 120 level. As always, have your risk management strategy in place and be ready to sell if the stock goes 7% below your buy point.
Investors can check out IBD Stock Lists and other IBD content to find dozens of the best stocks in addition to ExxonMobil.
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