We started this series by analyzing ExxonMobil’s (XOM) stock performance compared to crude oil and the equity market in the fourth quarter. We saw that ExxonMobil stock, oil prices, and equity markets have all fallen in the fourth quarter. We also reviewed ExxonMobil’s moving averages.
Now, we’ll discuss the implied volatility in ExxonMobil to forecast its stock price range until December 31.
Expected price range
The implied volatility in ExxonMobil stock has risen by 6.0 percentage points on October 1 to the current level of 21.6%. During the same period, ExxonMobil stock has decreased 10.3%. So far in the fourth quarter, the implied volatility in ExxonMobil and its stock price have moved inversely.
Considering ExxonMobil’s implied volatility of 21.6% and assuming a normal distribution of prices (bell curve model) and a standard deviation of one (with a probability of 68.2%), ExxonMobil’s stock price could close between $82.1 per share and $71.8 per share for the 35-day period ending on December 31. Currently, ExxonMobil stock trades at $77.0 per share.
Peers’ implied volatility
The implied volatility in Total (TOT) has risen by 9.6 percentage points on October 1 to the current level of 28.7%. The implied volatilities in PetroChina (PTR) and YPF (YPF) have increased by 4.3 percentage points and 3.9 percentage points, respectively, during the same period. PetroChina and YPF’s implied volatilities stand at 32.9% and 48.6%, respectively.
If we consider the stock price movements, Total, PetroChina, and YPF have fallen 16.3%, 17.4%, and 3.5%, respectively, since October 1. These stocks and their implied volatilities have moved in the opposite direction during the quarter.
Next, we’ll discuss ExxonMobil’s dividend yield trend.