Exxon Mobil Corporation (XOM)

[Timothy Smith]

IF YOUR A BULL

Exxon has been outperforming the Energy Sector ever since it declared a dividend increase of 21% in 2Q2012, compared to the previous quarter's figure, and has seen increased investor interest due to its dividend yield, which is higher than its 10-year average.

If the slowdown in the U.S. and Chinese economies is reversed and the European Union debt crisis is resolved, oil price could revert to levels of $100/bbl. In such a case, the stock price could target a price of $101/share.

IF YOUR A BEAR

Oil prices have dropped by an approximate 20% since the debt crisis in the European Union intensified and the slowing signs of growth from the U.S. and China.

Since oil prices and profitability are highly correlated, any negative development on this front would drive down earnings as well as the stock price. However, historically, OPEC producers adjust their output according to the economic scenario to support oil prices.

If all negatives kick in and the prices of oil drop further, then the stock could trade below $70/share.