Exxon Mobil Stocks Face Support Test Amid Declining Oil Prices

Oil prices are experiencing a significant drop, driven in part by Israel’s decision to avoid targeting Iranian oil facilities. This shift has sent most oil-related stocks trending downward.

Exxon Mobil Corporation XOM is particularly impacted. Should its shares continue to fall, they are likely to find support around the critical $109.50 level, which served as a key support area in both June and September. This is why Exxon Mobl is highlighted as our Stock of the Day.

In the world of financial markets, price points that once acted as support tend to do so again, a phenomenon often referred to as “seller’s remorse.”

For Exxon Mobil, many traders sold their shares near $109.50 back in June. When the stock made a recovery shortly after, some of these sellers regretted their choice and decided to buy back in at the same price, thereby reinforcing it as a support level.

It’s crucial to note that sellers will only repurchase their shares at the price they initially sold for.

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As the stock returned to $109.50 in September, buyers acted on their previous regrets and placed substantial buy orders. This influx of orders helped establish support at the same price that had functioned as support before.

If the trend continues downward for Exxon, the chances are high that support will re-emerge at the same $109.50 level once again.

Stocks typically rebound after hitting support levels due to the psychology of investors and traders. Concerns arise among those who contributed to the support with their buy orders. They fear that sellers will turn to buyers offering higher prices.

This anxiety often leads them to increase the bid prices they are willing to pay. Observing this, other buyers act similarly, potentially sparking a bidding war that pushes the stock price higher—a scenario that occurred for Exxon in September and may happen again.

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