An Oil Pair Trade
It wasn't until Bob Byrne mentioned to me this morning that Chevron (CVX) might be a short if the market starts to fade that I actually looked at the stock. The chart is strong here, but maybe too strong. Momentum is very strong, but you can't expect anything other than that when you see the parabolic rise in CVX price. The steep channel seen on the daily chart doesn't lend a whole lot of credence to support under the current price. While CVX looks great here, it got me thinking about Exxon Mobil (XOM).
Exxon Mobil (XOM) Source: StockCharts.com View Chart » View in New Window »XOM has a strong chart here as well. The price breakout looks very early and similar to CVX with a $93 target on the table. RSI has pushed higher into breakout mode along with price and stochastics has already demonstrated the momentum found in the energy space. But why just buy XOM? If the market falters or fades or energy loses the momentum, XOM will probably fall along with CVX. However, I don't know that it will fall as far. And if the market continues to rise, my thought was XOM would close the gap in performance....398 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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