Chevron Stock Could Reclaim Former Highs

CVX could benefit from a shift in sentiment in the options pits

Deputy Editor
Jun 14, 2022 at 1:09 PM
facebook twitter linkedin


Oil and gas concern Chevron Corporation (NYSE:CVX) is seeing its shares pullback from a June 8, all-time high of $182.40, now having lost 5.5% in the last week. In addition, Chevron stock is slightly underperforming the Energy Select Sector SPDR Fund (XLE), a market-cap-weighted index of U.S. energy companies trading on the S&P 500 Index (SPX). Investors shouldn't fret, however, as the former equity has just dipped toward a trendline with historically bullish implications. 

Specifically, Chevron stock just landed on a study from Schaeffer's Senior Quantitative Analyst Rocky White after pulling back to its 80-day moving average. Per White's study, the equity has seen five similar pullbacks over the past three years, and finished higher in 60% of the circumstances, averaging a 5.6% gain. From its current perch of $169.53, a move of similar magnitude would put CVX just above $179 -- just off of its aforementioned highs.  

CVX Chart June 14

A round of upgrades could give Chevron stock a boost as well. Of the 16 analysts in coverage, seven say "hold" or worse.

A shift in the options pits could also put wind at the stock's back, as traders have moved in favor of bearish bets in recent weeks. CVX's Schaeffer's put/call open interest ratio (SOIR) of 1.0 stands higher than 80% of readings from the past year -- indicating short-term options traders have never been more put-biased in the past 12 months.

What's more, the stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 92% of readings from the past year.

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners