A very smart person we know told us he bought XOM yesterday. He did not follow that up by trying to sell us on this fact, so he was not “talking his book.” He simply stated the fact that he bought the stock.
We do not cover XOM. (Do investors really need small and medium size firms covering a mega-cap name like this one?) Therefore, we cannot talk about the stock on a fundamental basis. However, we can say that the stock is now yielding over 9%. Since we don’t cover the stock, we cannot talk about whether we think their dividend is safe or not, but we’re sure you can get plenty of informed opinions on this subject.
We can also point out that on the technical side of things, XOM is becoming INCREDIBLY oversold. It’s weekly RSI chart has moved below 10!!!!! That’s the most oversold it has EVER been…by a long shot!!! Our charts go back to 1980…and there is not other time that XOM came even close to being as oversold as it is right now…..We’d also point out that it now stands at more than a 50% discount to its 200 week MA. That discount is TWICE as large as it has EVER been on a percentage basis!!!...... Therefore, it should be getting quite ripe for a bounce at some point very soon.
Again, we cannot talk about XOM’s dividend. However, if you believe it is safe, this could be a very nice stock for both short-term traders and long-term investors. Even if oil falls further, a 9% yield will “pay you to wait”…assuming they don’t cut the dividend. (BTW, it also still has a AAA rating. We don’t know how safe that rating is either, but we can say that there aren’t many AAA rated companies left today.)
Matthew J. Maley
Chief Market Strategist
Miller Tabak + Co., LLC
Founder, The Maley Report
275 Grove St. Suite 2-400
Newton, MA 02466
Although the information contained in this report (not including disclosures contained herein) has been obtained from sources we believe to be reliable, the accuracy and completeness of such information and the opinions expressed herein cannot be guaranteed. This report is for informational purposes only and under no circumstances is it to be construed as an offer to sell, or a solicitation to buy, any security. Any recommendation contained in this report may not be appropriate for all investors. Trading options is not suitable for all investors and may involve risk of loss. Additional information is available upon request or by contacting us at Miller Tabak + Co., LLC, 200 Park Ave. Suite 1700, New York, NY 10166.