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Three Stocks That Must Be Followed

 The major stock market indexes seem to follow one sector very closely. That sector is the large integrated energy stocks. Exxon Mobil Corp (NYSE:XOM), Chevron Corp (NYSE:CVX), and ConocoPhillips (NYSE:COP), are the big three stocks in this leading industry group. When these stocks rally the markets follow and will usually trade higher. The opposite is very true when these stocks decline, the major stock market indexes will often sell off. Therefore, these stocks are extremely important when tracking the major stock market indexes.

Exxon Mobil Corp. is the most important stock of the large integrated energy stocks. This company has the largest market capitalization in the stock market at $304 billion. This stock is also a major component of the Dow Jones Industrial Average. Therefore, it can often single handedly move that index. Currently the pattern on the daily chart for Exxon Mobil Corp. is somewhat weak. The stock is trading below the major daily moving averages and this is a sign of weakness. The stock should have strong daily chart support around the $57.00 area. This is where it would become attractive to traders for a bounce.

Chevron Corp. is the next most important integrated energy stock. The reason for its importance is that that the market capitalization for this company is $154 billion. This company is basically half the size of Exxon Mobil Corp. The pattern on the daily chart for Chevron is short term bearish, however, the stock is trading above its daily 50 and 200 moving averages. This stock will have near term support around the $74.50 area. Should that area fail to hold then Chevron Corp could test the $71.50 support level next.

ConocoPhillips has a market capitalization of $81 billion. Therefore, it will not carry the same weight as Exxon Mobil Corp. or Chevron Corp. However, it is still very important and one of the integrated energy leaders. The ConocoPhillips chart looks very similar to the Chevron chart. This stock also has a short term bearish chart formation in place. The near term support level for the stock is around $53.00. Should that level fail to hold as support the stock could test the $51.50 area. This would be a possible bounce area for the stock.

The large integrated energy stocks have been leaders for the stock market over the past nine years. Exxon Mobil Corp. is the most important of the three major energy companies. At this time all of these stocks look weak on the charts and could see further downside pressure.
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Nicholas Santiago
Chief Market Strategist