Exxon Mobil Corporation XOM and Sunrun, Inc RUN both slipped over 4% at one point Monday morning before rebounding to trade mostly flat. The move came in tandem with the general market, which saw the S&P 500 slide before bouncing.
The two energy-related stocks have both been consolidating recently, after enjoying bull cycles, although Exxon has been on an upward trajectory for a comparatively longer period of time.
From a technical standpoint, Exxon looks slightly stronger than Sunrun, due to the development of a bullish double-bottom pattern on Exxon’s chart. While Exxon also has a quadruple top pattern on the daily chart, the double bottom could help to propel the stock through the area.
In comparison, Sunrun has formed a bearish double-top pattern, without a double-bottom pattern, which the stock will need to break through to give bullish traders more confidence going forward.
It should be noted, however, that events affecting the general markets, negative or positive reactions to earnings prints and news headlines can quickly invalidate patterns and breakouts. As the saying goes, "the trend is your friend until it isn't" and any trader in a position should have a clear stop set in place and manage their risk versus reward.
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The Exxon Chart: Exxon formed a double bottom pattern on Nov. 10 and Monday near the $107.50 level and because the area held as support on Monday, bulls came in and bought the dip. The dip buying had Exxon working to print a hammer candlestick, which could indicate higher prices will come again on Tuesday.
If that happens, traders will want to see Exxon move up through the quadruple top at $114.66 over the next few days to reach a new 52-week high. If Exxon rejects that level for a fifth time, another retracement to the downside is likely.
Exxon has resistance above at the 52-week high and below at $109.58 and $105.57.
The Sunrun Chart: Like Exxon, Sunrun was working to print a hammer candlestick on Monday, which suggests a larger rebound could take place on Tuesday. If that happens, bullish traders and investors will want to see the stock bust up through $32.53, where a double top pattern was printed on Nov. 15 and Nov. 18.
If that happens, Sunrun’s uptrend will remain intact, with Monday’s low-of-day serving as the most recent higher low within the pattern. If Sunrun rejects the $32.50-mark, further downside is likely on the horizon.
Sunrun has resistance above at $31.36 and $36.58 and support below at $27.83 and $22.62.
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