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One of the hints last autumn to be prepared for a sudden change in character towards an upside breakout was the price action in Exxon Mobil. As I wrote in this post on October 10, 2011, the energy giant was flashing a bullish divergence to the broad market, breaking out above $75.
Presently, Exxon is consolidating just under the all-important $88 level. As you can see on the updated weekly chart below, we have an inverse head and shoulders bullish setup. If a move through $88 is sustained, we are looking at an upside measured move target above $105. Beyond that, inflows to XOM are also suggestive of the “lock and roll” rotation down to the industrial/material/energy complex in this new quarter.
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