Playbook: Chevron Stock Has Room to Run

CVX has consolidated after a bull flag pattern to start 2023

CMT, Senior Market Strategist
Jan 24, 2023 at 8:00 AM
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Below is an excerpt from this yesterday's episode of Schaeffer's Playbook of the Week, featuring Schaeffer's Senior Market Strategist Matthew Timpane. Below, Matthew makes a bullish case for oil & gas stock Chevron Corporation (NYSE:CVX).

"As you can see below, Chevron just had a flag breakout and has gone through a consolidation phase that's now resetting up. If the shares can get above $181 level, it's at least off to the races back to the prior highs and maybe much more than that.

PLBK CVX

CVX is above the $180 pivot level when looking at open interest configuration. That’s a key gamma strike level, and peak call open interest is at the 200-strike that could act as a magnet. That’s through April expiration, too, so there's plenty of room and time up to that. 

Data at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows CVX with a 50-day put/call volume ratio that stands higher than 98% of annual readings. The 175-strike put wall is there for support too, right along the equity's 20-day moving average.

The stock's Schaeffer's Volatility Index (SVI) of 27% stands in the 12th percentile of readings from the past year, so options are pretty cheap right now. What's more, CVX's Schaeffer's Volatility Scorecard (SVS) tally sits at 88 out of 100, which points towards the tendency to outperform volatility expectations."

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