Call it a slick move by the oil and gas company, but Exxon Mobil is achieving profitability despite a challenging macro environment, especially with falling oil prices.
The oil and gas giant outperformed in its latest earnings results. More impressively, CEO Darren Woods praised the company’s ability to churn a profit despite the macroeconomic challenges facing the industry.
Looking ahead, if Exxon can break into a bullish pattern, then traders will want to consider using the Direxion Daily XOM Bull 2X Shares (XOMX). That’s especially the case if their conviction is high. The single-stock ETF offers 200% of the stock’s daily results, allowing for additional profitability potential. Oil prices can exhibit heavy volatility, translating to similar market movements in a mover and shaker of the industry like Exxon. Positive news regarding the economy and trade talks could certainly boost oil and thus, benefit Exxon in return.
The stock has yet to recover from April’s tariff-fueled selloff, but it could present an area of value for traders who think more upside is ahead. If they think the bearish trend will resume after it breaks out of its current sideways pattern, then an inverse approach via the Direxion Daily XOM Bear 1X Shares (XOMZ) is an option. It’s an easy way for traders to take the other side of bullishness without a margin account. That’s especially the case if the trend of less drilling due to falling oil prices continues to prevail.
Douglas Yones, CEO of Direxion, noted the nuances of trading Exxon and XOMZ are related to “crude oil prices, associated demand fluidity and geopolitical moves.” Single-stock funds like XOMZ "provide the focused exposure active traders seek to express their short-term convictions on both.”
A Diversified Oil Sector Play
Traders who want to avoid the concentration risk, but still like the bullish prospect of Exxon and other oil companies, can trade the full energy sector for a diversified play. That’s available with the Direxion Daily Energy Bull 3X Shares (ERX ).
The majority of the fund allocates to Exxon, but traders also get exposure to other oil industry giants like Chevron and Conocophillips. Those three names round out the top three holdings in the fund as of June 5. This is because the fund tracks the Energy Select Sector Index (IXETR). It includes domestic companies operating within the energy sector. More specifically, oil, gas and consumable fuels; and energy equipment and services.
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