We're putting out a "bellcow alert" for the broad stock market – and the oil stock market in particular. Our bellcow is oil giant ExxonMobil (XOM).
Many industry professionals consider ExxonMobil the world's best-managed big oil company. Its ability to value assets and manage them efficiently for the long-term benefit of shareholders is legendary. XOM is also a "go to" stock for large investors when they want to increase oil stock exposure. This makes XOM a vital stock to monitor. If XOM isn't working, it's a terrible omen for stocks… especially oil stocks.
The March 2009 panic selloff sent XOM shares into the low $60s. Earlier this year, we pegged that price as an "ultimate stress test" level for XOM. The Deepwater Horizon disaster and the recent oil correction caused XOM to violate that level and sink to $59 per share.
Now, however, XOM has stabilized, caught its breath, and formed a small sideways base near $60. For the sake of the broad market's health, and the oil stock market in particular, this big bellcow needs to hold this level… and stage a rally. Our bet is it does.
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