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What ExxonMobil’s Moving Averages ahead of 1Q18 Earnings Suggest

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ExxonMobil’s moving average trend until January 2018

ExxonMobil (XOM) posted better-than-expected 1Q17 earnings, which paused the downtrend witnessed in the previous quarter. But XOM’s 50-day moving average (or DMA) stayed below its 200 DMA in 2Q17 and 3Q17. However, in 4Q17, as WTI started rising, XOM stock began surging. Plus, tax reforms were announced in the US, pushing up the stock. Led by the stock upsurge, XOM’s 50-day moving average rose steeply, ultimately crossing over its 200-day moving average in 4Q17.

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ExxonMobil’s moving average trend since January 2018

Since January 2, the decline in ExxonMobil stock has led to the fall in its 50 DMA. ExxonMobil’s 50 DMA broke below its 200 DMA, which is not a technically favorable sign. Weaker broader markets perhaps impacted the stock, which we discussed in the previous part of this series. In the same period, ExxonMobil reported its 4Q17 earnings, which missed the Wall Street analyst estimate and could have further pressured ExxonMobil stock.

Currently, XOM’s 50-day moving average stands 5.2% below its 200-day moving average. Going forward, if XOM puts up better-than-expected 1Q18 earnings, ExxonMobil’s stock price and its 50 DMA could recover. ExxonMobil is expected to post its 1Q18 earnings on April 27, 2018.

Peer moving averages

Contrary to ExxonMobil’s moving average position, PetroChina (PTR) and YPF’s (YPF) 50-day moving averages stand 3.8% and 0.3% above their 200-day moving averages, respectively. Also, ENI (E) and Suncor Energy’s (SU) 50-day moving averages stand 4.4% and 0.4%, respectively, above their 200-day moving averages.

Now, we’ll look at the moving averages of the broader market, the SPDR Dow Jones Industrial Average ETF’s (DIA), and the SPDR S&P 500 ETF (SPY). The moving average positions in these ETFs closely mirror the environment of the overall economy, which includes several industries. DIA and SPY’s 50-day moving averages trade 4.7% and 3.5% above their 200-day moving averages, respectively.

In the next part, we’ll look at estimates for ExxonMobil’s stock price range between now and its earnings release.

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