Large-cap stocks rose quite a bit more than their small-cap brethren last week, leading me to believe that we're witnessing a shift in the balance of power between them. It would certainly fit our theory of what's likely to happen over the rest of this year, because fund managers who need to buy stocks in a hurry cannot mess around with small caps: They are too hard to purchase without moving their price.

I believed that money managers who found that their performance was trailing the market would opt to buy large-cap technology stocks: They're among the easiest to purchase and to justify from a growth perspective.

But tech stocks are already up quite a bit. And they currently feature relatively full valuations.

So it's very possible that the "beta chase" for the fourth quarter will involve the much-more-undervalued large-cap companies. Just a few short weeks ago, I noted that the companies in this group were flatlining toward the apex of "wedge" indecision patterns, but could start to rally hard if they emerged above their wedges.

And it looks like that's just what's happening now. And that's actually quite fascinating. You see, you can't have a beta "chase" in stocks in which there is no beta. That's pretty obvious. But if you can get those big stocks running – providing returns greater than the market, which is the colloquial meaning of beta – then the managers can have their cake and eat it, too.

They can buy companies that are large enough to purchase in size, and which are relatively cheap, and which have potential to rise briskly.

One such company is Exxon.

Anticipating New Highs

I identified Exxon as a candidate for a breakout a couple of weeks ago, when it was still mired within the wedge of indecision.

It's no longer mired.

As the chart below shows, Exxon's stock broke out late last week, and is now on the loose. Just to get back to its January level – when it was trading at about $80 a share -Exxon's shares would need to advance 9.6%.

And they could move higher.

In early January, Exxon's shares traded as high as $82.73 and closed as high as $81.64 – price points that remain their respective highs for the year. A return to its Jan. 2 close at $81.64 alone would represent a gain of about 11% from current levels, a major move for a stock like this.