Stocks quoted in this article:
Chevron (CHV 84-1/4) has agreed to buy rival oil company Texaco (TX 55-1/8) for $45.4 billion in stock and assumed debt. In addition, it was announced that TX may need to exit its refining ventures with Royal Dutch Petroleum's (RD 62-3/4) Shell Oil Company in order to gain clearance of its merger with CHV.
CHV and TX both finished Friday's trading lower by more than three percent. CHV dipped back below its 10-day and 20-day moving averages, while TX moved back beneath its 20-month moving average.
Information from Schaeffer's Daily Sentiment shows that pessimism has been growing toward CHV. On September 19, Schaeffer's put/call open interest ratio (SOIR) on the stock was 0.16, which is significantly less than its current reading of 0.45. As for TX, its SOIR has declined from 0.76 on October 6 to its present 0.55 mark, indicating that optimism toward the shares is on the rise.