XOM, Exxon Mobil Corp.

xom sept 1 2014

This is another diagonal or wedge. It has all the attributes. This is a 5th wave and not particularly robust, evidenced well by the continuous decline in volume. Each leg, up or down is a-b-c, waves 4 and 2 overlap and often there is a throw-over at the end. There is alternation between waves 2 and 4. Wave 3 does not have to be the longest, it just cannot be the shortest (which means that any new high, if it occurs, cannot be  more than about $5 above the present high of $104,76

With all that the future course of this stock is well defined. It should drop back to, at least, the base of the diagonal (about $55) without making a new high. It should do this fairly rapidly, roughly in 1/3 of the time it took to go up, say a year and a half. All of this is a relatively sure thing! A Jan. 2016 80 option is trading at about $2.50 – $2.70 potentially giving a 10 to 1 trade, but we do not give trading advice! Talk to your broker.