A Lot of Turmoil for Very Little Gain... Until Now

[Trading With Larry Benedict]( A Lot of Turmoil for Very Little Gain… Until Now By Larry Benedict, editor, Trading With Larry Benedict 2023 has been an eventful year for oil. There have been successive OPEC+ production cuts, ongoing conflicts in the Middle East and Ukraine, and even drone attacks on U.S. ships earlier this month. Yet despite all this turmoil you’d expect to push oil higher, WTI crude oil is fast closing in on its yearly lows. One stock riding these bumps is Exxon Mobil (XOM). It’s the U.S.’s largest oil and gas producer. In late September, it was pushing $120 a share. But it recently traded down around $98. So let’s see what’s in store from here… Recommended Link [Market Wizard speaks after years of behind-the-scenes trading successes]( [image]( During the 2008 financial crisis, the stock market fell 37%. Yet one man — hedge fund manager Larry Benedict — posted 23% gains. He delivered $95 million in pure profit to his clients. In the first half of 2022, he did it again. Those following his work saw the chance for 2x and 3x growth. He released a trading video where he gives you the ticker. [Watch it here.]( -- A Choppy Market The chart of XOM below shows just how choppy things have been in 2023. The short-term 10-day Moving Average (MA, red line) has been swinging all over the place. Yet the 50-day MA (blue line) was recently tracking around where it was at the start of the year: Exxon Mobil (XOM) [chart] Source: e-Signal These types of markets can be extremely frustrating for buy-and-hold investors. But they can offer plenty of opportunities for short-term traders. You just need to know how to trade them. In these pages, we often look for mean reversion trades. That’s where the stock price has shot too far in either direction, making it vulnerable to a pullback. And that’s where momentum reversals fit into the picture… In the chart, you can see three key peaks at ‘A,’ ‘B,’ and ‘C.’ Each peak reversed as our momentum indicator, the Relative Strength Index (RSI), fell from the upper half into the lower half of its range. XOM was closing in on that third peak when we last checked inon it [here](. (You’ll also note that these three reversals and subsequent downtrends also saw the 10-day MA bearishly crossing below the 50-day MA.) Well, as the chart shows, the opposite also applies… Take another look: Exxon Mobil (XOM) [chart] Source: e-Signal Those rallies up to A, B, and C coincided with the RSI breaking into its upper range and the 10-day MA breaking above the 50-day MA. If you look closely at the chart, you’ll also see multiple other smaller moves and countermoves (particularly from May to August). These also reflect these underlying swings in momentum (RSI). But it’s the most recent action of the RSI that I’m focusing on right now… As you can see, it’s been tracking in its lower range. And it has recently dropped into oversold territory (lower grey dashed line). So what can we expect from here? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Setting for a Bounce The RSI went into oversold territory back in March (after it retraced from its peak at ‘A’). Then it made a ‘V’ (orange circle) and rallied higher… And XOM bottomed out before rallying up to its peak at ‘B.’ Right now, I’m not expecting to see another rally of this magnitude. But XOM could still be setting itself up for a bounce… Even if it’s just a brief one. That could still be enough for a quick and profitable long trade. If the RSI repeats that ‘V’ pattern from March and tracks up toward resistance (green line), then XOM could quickly trade back in the $102–$104 range. Regards, Larry Benedict Editor, Trading With Larry Benedict Mailbag Where do you think oil will trade in 2024? Send in your thoughts to feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [AI IS BORING!]( AI’s all over the news. And AI stocks have gone on a tear. But there’s a huge problem with AI: it’s BORING! Consider ChatGPT, the most hyped AI… You ask it a question, and it produces an answer. It’s just a word machine. Yawn! I’m tired of boring AI, even though I used [what Harvard calls the “Super Platform driven by AI”]( to make over a million bucks last year. So forget ChatGPT! 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