Get Short Exxon-Mobil
by Chris Johnson 04/21/09
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As I'm sure you noticed, oil prices are sliding dramatically -- and oil stocks are getting hammered.
The Dow (DJI) was down 3.6% yesterday, as oil plunged and investors took to the hills. Investors smell a rat, and the rat is the economy. Suddenly, we've got an oil glut and low demand.
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Not only that, but the March rally convinced a lot of investors that happy days were here again. So, of course, they went out and loaded up on oil stocks. Oops!
And into this mess steps Exxon-Mobil (XOM), which is set to announce earnings Thursday, April 30. (Learn 12 Keys to Trading Earnings for Profits.)
Like I said, the stock has lots of new buyers, all bullish on a strong economic recovery.
Now, XOM may hit its estimates a week from Thursday. But what's most likely to happen is that a big, positive reaction won't materialize because of the demand problem. That'll scare the begeebers out of the newbies, who'll fall over themselves to dump the stock.
The analysts play a big role in this sad tale, too. They've raised their outlook ahead of earnings AND 64% of them have an all-out "buy" on the stock. Watch those ratings shift next week.
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