Who Is In Control Of XOM Price

Market Participants Revealed On Stock Charts

With oil prices still fluctuating around 45-50 dollars, many retail and technical traders have been attempting to sell short big name oil stocks as well as small cap oil stocks. Selling short most oil stocks has become a higher risk trade. Here is why.

Professional Traders and Market Makers ask a simple question that most retail traders do not even think about which is, “Who is in control of price?” With nine Market Participant Groups and a tenth emerging at this time, who is controlling price dictates how traders should approach trading a stock.

The first chart example below of Exxon Mobil Corporation (NYSE:XOM) shows the conflict between smaller lot sellers, either selling short or selling in capitulation versus the large and giant lot institutional and professional traders buying.

The Buy Side Institutions clearly have control. This is seen in the long volume bar and the small resting day aka Doji candle that formed on that day even with extremely high volume. Basically the volume for that day doubled over the prior few weeks of volume. Indicators confirm that larger and giant lot buyers are buying the stock, as smaller lots are selling or attempting to sell short unsuccessfully.

The Base Bottom is precise with tightly compacted candles, and consistent highs and lows. What is causing the sudden interest in this stock?

The second chart example below with a weekly view helps explain what is going on and why.

This stock has dropped into a prior Dark Pool “buy zone” which can trigger more buy orders automatically. The top was also clearly defined by the extreme peak on MFI, and the flat line of Accum/Dist as the stock developed the top.

Summary

In order to understand how price will behave in the near term, it is important to correctly identify who is controlling price at the time. In addition, understanding the Market Participant’s intent of the trade, duration of the hold, share size, and trading venue also helps clarify price action.

Although many traders are still assuming that oil prices will plummet further, most oil stock charts are indicating that the first bottom attempt is underway. Bargain hunters are moving in quietly, even while the less informed and smaller lots are continuing to sell. Dark Pools prefer to buy into the selling of smaller lots, and use this strategy often on extremely oversold stocks.