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Mean reversion · XOM · 1D

Does Stochastic oversold bounce actually work on XOM? We tested it

We ran Stochastic oversold bounce on XOM through walk-forward testing and a 100-run random-entry gauntlet. 3 of 4 unseen periods positive. Beat 76 of 100 random-entry runs.

WALK-FORWARD VERIFIED EDGESTACKER ENGINE
Return +28.8%
Win rate 60.9%
Max drawdown −18.3%
Trades 23
Sharpe 0.35
Equity curve

Equity curve over Aug 2016 to Jul 2026. Hover any point for its value. Turn on buy and hold to compare.

PeriodWindowReturnSharpeTrades
1 Aug 2018 to Jul 2020 −1.2% −0.14 2
2 Jul 2020 to Jul 2022 +20.5% 0.83 8
3 Jul 2022 to Jul 2024 +1.0% 0.13 6
4 Jul 2024 to Jul 2026 +1.3% 0.14 6
3 of 4 periods positive. Mean Sharpe 0.24. Worst period −1.2%.
Market matrix
Edge held on 6 of 28

The same rules, tested on 28 tickers. Edge held on 6. We ship it on those.

XOM SHIPPED
76/100 EDGE
NFLX
96/100 EDGE
META
77/100 EDGE
UBER
77/100 EDGE
QQQ
76/100 EDGE
AVGO
76/100 EDGE
Show every ticker we tested
MSTR
73/100 NONE
IWM
68/100 NONE
DIA
68/100 NONE
MSFT
66/100 NONE
NVDA
57/100 NONE
COIN
54/100 NONE
AMZN
50/100 NONE
MU
50/100 NONE
JPM
49/100 NONE
RIOT
44/100 NONE
AAPL
37/100 NONE
GLD
33/100 NONE
AMD
30/100 NONE
MARA
28/100 NONE
BA
27/100 NONE
SPY
26/100 NONE
GOOGL
19/100 NONE
TSLA
7/100 NONE
SMCI
6/100 NONE
HOOD
too new TOO NEW
PLTR
too new TOO NEW
SOFI
too new TOO NEW
The rules
Entrywhen STOCH %K(14/3/3) of close crosses above 20 AND close is above SMA of close over 200 bars
Exitwhen a signal fires (STOCH %K(14/3/3) of close is above 80)
Sizing**Position size:** no fixed stop distance to size against. This strategy exits on signal only. Size by conviction, or add a hard stop for a size-by-risk number.
Diagnosis

This strategy did make money overall, with a total return of 28.75% over 23 trades, but the ride was very lumpy. The worst stretch was a brutal drawdown of -18.32% that lasted nearly two years, from late 2022 to September 2024, which would have been painful to sit through. The win rate of 60.87% is decent, but the average trade only made 1.23%, so the profits were not huge on any single trade. The entry timing has a real edge, beating 76% of random entries, meaning the entry signal itself is a strong part of the strategy's success. The consistency figure shows the edge was present in 3 out of 4 test periods, so the profit did not come from just one lucky stretch.

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