Exxon shares have been forming lower highs and higher lows, creating a symmetrical triangle pattern visible on its daily time frame. Price is currently testing the top of the triangle and might be due for a move down.
A short-term double top pattern can be seen right at the triangle resistance, indicating that further declines are likely. Price is still testing the neckline around $80 and a break lower would put it on track towards the triangle support around $75.
However, the 100 SMA looks ready for an upward crossover from the 200 SMA to indicate further gains. In that case, an upside break from resistance might still be possible, taking Exxon shares to the next resistance at $86. On the other hand, prolonged selling pressure could lead to a break of the triangle support and a selloff until the lows at $68.
Stochastic is on the move down so price might follow suit. RSI hasn’t quite reached the overbought area but is also heading south, indicating a return in bearish pressure.
The company reported that it is selling $12 billion of new bonds on Monday, which is a sign that investors are still willing to put money in Exxon. Still, this deal illustrates how high borrowing costs have gone for the energy company, as the drop in oil prices has weighed on profitability. A 10-year bond is expected to yield 1.3 percentage points more than Treasurys, compared with 0.58 percentage point for a 10-year bond last year.
Even so, investors are hopeful that crude oil has already bottomed out, especially since leaders of oil-producing nations seem willing to come up with a deal to cap production and boost prices.
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