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XOM: Value Trap

August 14, 2008 5:54 PM

Exxon has been trading sideways now for almost 2 weeks. My philosophy on this type of action is the trend is likely to continue. Some commodity type stocks did make firm reversals and took off, like MON, etc., but the action on XOM strongly suggests another push down. It is an avoid as I see things. I know the PE is exceptionally compelling and all value traps have that same thing going for them. But the dividend is only 2%, sentiment on oil is obviously negative, etc. I just do not like it here.

The short was way up at the high. Do you see why this should be a pay site? I would have seen that if i was spending 10 hours a day on this instead of working. It made a “CHK” type of a rejection off the high and down she goes. Speaking of CHK, it held my “must hold” point of $42.15 by a nickel on 08/11 and up $4 off that. Not a bad risk/reward trade. Lose a nickel or make $4. Opps, charts do not matter, my bad.

Written by Tom@StockBlade.com · Filed Under XOM 

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