Anyone notice that the biggest oil giant in the world is breaking out to new highs? This is not what one would expect with crude oil trading under $60 a barrel and nearing new 52-week lows. Yet this is what’s happening as we kick off 2026. Exxon Mobil (XOM) just closed above $120 mark for the first time of 2025. Price action is telling us something very differently than the crude oil market. This is another reason why I am happy to be a market technician and trader first. Price can lead and can open the door to favorable opportunities. When it comes to XOM and favorable risk/reward metrics – there’s a large knock on the door and its worth answering. The set-up Despite the volatility and lower trajectory in crude prices, XOM has been quite resilient. It finished the year up 11.9% and near its highest close all year. The breakout can be seen in the one-year chart below. This sets up clear trading opportunities with limited downside risk and a potential strong upside reward when looking at both the daily and longer-term weekly charts. Let’s look at the charts on those multiple time frames to demonstrate the potential for a continued rally. On a longer-term basis, let’s examine the weekly charts on a five-year timeframe. XOM has been consolidating between roughly $102 and $118 since early 2023, defining a broad multi-year trading range. A decisive breakout would require follow-through above its major resistance at $126, ideally accompanied by expanding volume. Weekly RSI has broken a long-term downtrend and begun forming higher lows, suggesting improving longer-term momentum following an extended consolidation. The technicals First the one-year daily chart. Since establishing a 52-week low in early April, price has trended higher, forming a sequence of higher highs and higher lows, consistent with an emerging intermediate-term uptrend. Momentum has improved alongside price: RSI has been in a short-term uptrend since early August, holding higher lows and remaining above its midline, signaling strengthening demand. Shares of XOM had repeatedly stalled in a well-defined overhead resistance zone near $118–119, a level that has capped advances multiple times over the past year. The more often overhead resistance is tested, the more likely the chance of a breakout will occur. Last week, we finally made it through that key resistance level. The trade The risk/reward is looking good and potentially great. We have eclipsed that $120 level and hope to keep trending above there as we attack major resistance at $126. To the downside set stops just under $112. That coincides with the longer-term uptrend as well as the rising 50-week moving average. It gives you a little wiggle room if this is not the perfect time to jump in. However, the old technical adage – the longer the base the higher in space — is one to monitor here. We have broken the first line of resistance and aim to attack the next. If the stock can achieve this realistic goal, then a gusher of profits and a run into the $140s should await. Jay Woods, CMT with Chase Games DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
