Has anyone noticed that the world’s largest oil giant is hitting new highs? This is not what you would expect with oil prices trading below $60 per barrel and approaching 52-week lows. But this is what is happening at the start of 2026. Exxon Mobil (XOM) closed above $120 for the first time in 2025. Price trends are telling us something completely different from the oil market. This is another reason why I’m happy to be a market engineer and trader first. Prices may lead the way and open the door to lucrative opportunities. When it comes to XOM and favorable risk/reward metrics, there’s a loud knock on the door and it’s worth answering. Despite the volatility and downward trend in oil prices, XOM has been very resilient. It ended the year up 11.9%, close to its highest point of the year. The breakout can be seen on the 1-year chart below. This creates a clear trading opportunity with limited downside risk and potentially strong upside profits when looking at both daily and long-term weekly charts. Let’s take a look at these multi-timeframe charts to illustrate the potential for the rally to continue. For a longer term, let’s examine the weekly chart on a 5-year time frame. XOM has been consolidating between approximately $102 and $118 since early 2023, defining a broad multi-year trading range. A definitive breakout would require followthrough above the key resistance at $126, ideally with increased volume. The weekly RSI has broken its long-term downtrend and is starting to form lows, suggesting that long-term momentum is improving after an extended period of consolidation. Technical First, let’s look at the daily chart for one year. Since hitting a 52-week low in early April, prices have been trending upward, forming a series of higher highs and higher lows, consistent with a new medium-term uptrend. Momentum improved along with price. The RSI has been on a short-term upward trend since early August, remaining at lows and above the median line, suggesting strength in demand. XOM stock has repeatedly stalled in a clear overhead resistance zone around $118 to $119, a level that has limited its upside multiple times over the past year. The more often you test the overhead resistance, the more likely a breakout will occur. Last week, we finally broke through that key resistance level. The risk and reward of the trade is good and can potentially be large. We are above that $120 level and would like to continue trending above it while attacking the major resistance at $126. The downside set stops just below $112. This is consistent with the long-term uptrend and the rising 50-week moving average. This may not be the best time to jump in, but it does give you some wiggle room. However, the old technical adage should be kept in mind here: the longer the base, the higher the space. We aim to break through the first line of resistance and attack the next line of resistance. If the stock can achieve this realistic goal, we should see a surge in profits and a break into the $140 range. Jay Woods, CMT of Chase Games Disclosure: (none) All opinions expressed by CNBC Pro contributors are solely their own and do not reflect the opinions of CNBC, NBC UNIVERSAL, its parent or affiliate companies, and may have been previously disseminated by them on television, radio, the Internet, or another medium. The above is subject to our Terms of Use and Privacy Policy. This content is provided for informational purposes only and does not constitute financial, investment, tax, or legal advice or a recommendation to purchase any securities or other financial assets. The Content is general in nature and does not reflect any individual’s unique personal circumstances. The above may not be appropriate for your particular situation. Before making any financial decisions, you should strongly consider seeking the advice of your own financial or investment advisor. Click here for full disclaimer.
