Notable outperformer, Alphabet Inc (NASDAQ:GOOGL) is taking a breather today, off 1.4% at $2,493.40 at last check, following news that a group of state attorneys general have brought a new antitrust lawsuit upon Google. The tech company is facing allegations that it has used anticompetitive tactics in order to take 80% commission from consumers purchasing subscriptions and digital content on their Android devices. App developers, meanwhile, have said Google's app store is the only option made available on the Android phone, giving them no other options for distribution. This marks the fourth antitrust lawsuit filed against Google this year. 

The equity just yesterday nabbed a record high of $2,545.68, just one week after showing up on a list of best performing S&P 500 stocks in July. It looks like GOOGL still has several layers of potential support sitting just below, including its 20-day moving average, which contained some of the stock's middling price action last month. Alphabet stock is up roughly 44% in 2021. 

A short-term breather for GOOGL isn't all that surprising, especially considering the equity's Relative Strength Index (RSI) of 73, which is firmly entrenched in "overbought" territory. Plus, it looks like a number of options bears have been banking on the stock cooling off. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Alphabet stock sports a 50-day put/call volume ratio that sits in the 69th percentile of its annual range. This suggests options players have been a bit more partial to long puts of late. 

At the start of every month, Schaeffer's Senior Quantitative Analyst Rocky White distributes the best- and worst-performing stocks on the S&P 500 Index (SPX) in the last 10 years. As we head into a new month, the first thing that stood out when opening the July Excel document was five of the 25 stocks on the "worst" list were oil & gas producers. With gas prices climbing and summer travel season starting to look more like 2019 than 2020, it seemed time to unpack the energy sector for the second half of the year.

It has been an outstanding six-to-12 months for energy. Ethanol, gasoline, crude, and natural gas all occupy the top 10 spots on year-to-date and year-over-year relative performance. According to a sector analysis conducted by White, 83% of oil and gas stocks are above their 80-day moving average, with the 41 stock tickers falling under this umbrella boasting an average year-to-date return of 64.4%. That's the heartiest return of the sectors tracked, comfortably outpacing the second-place travel and leisure sector's 60% 2021 gain.

Per White's data, ConocoPhillips (NYSE:COP), Marathon Oil Corporation (NYSE:MRO), and Exxon Mobil (NYSE:XOM) sport July returns of -3.5%, -3.4%, and -2%, respectively. For XOM, only two of the last 10 July's have ended in positive territory. Exxon Mobil's market cap peaked at $500 billion back in 2008, but now sits at roughly half that level.

Consider the Energy Select Sector SPDR Fund ( XLE) posts similarly uninspiring seasonal returns for the summer. In a table curated by Schaeffer's Senior Market Strategist Chris Prybal, you can see below that XLE's monthly returns are lowest in July, August, and September.

It's difficult to say, when looking at the below chart, whether that valuation number will come into any psychological play for XOM. But it is noteworthy that XOM's market cap fell to $133 billion at the Covid-19 lows, which is roughly half the current market cap. On XOM's chart, $59 equates to the $250 billion market cap level, so keep an eye on that area this summer as a potential inflection point.

It's important to keep in mind that when talking about a potential July pullback for the likes of COP, MRO, and XOM, these seasonal dips would still have the stocks within chip-shots from the annual highs wrought earlier this summer. In other words, this isn't so as much predicting a calamitous selling off, and more a short-term pause where bulls can catch their breath or discover an attractive entry point.

Last Thursday, U.S. crude oil prices topped $75 a barrel, the highest level since 2018. This has sparked think-pieces on the allure of electric vehicles, musings on the Organization of the Petroleum Exporting Countries and their allies (OPEC+), and general hand-wringing from the masses as the price to pump hits over $3.

Whether these warning signs are enough to warrant a play or not, implied volatilities of the COP, MRO, and XOM are at comfortable levels for options traders. Their Schaeffer's Volatility Index (SVI) , an average at-the-money (ATM) implied volatility of a stock's front-month options, come in at 31%, 48%, and 25%,respectively, all ranking below the 10th percentile of their respective annual ranges. This underscores an attractive buying opportunity for all three securities – regardless of what the seasonal trends could be hinting at.

Subscribers to Bernie Schaeffer's Chart of the Week received this commentary on Sunday, July 4.

Today's will be focused around  regularly scheduled initial and continuing jobless claims data, as well as the consumer credit report. 

The following companies are slated to release quarterly earnings today, July 8:

Helen of Troy Ltd. (NASDAQ:HELE -- $232.52) designs, develops, imports, markets, and distributes a portfolio of consumer products worldwide. Helen of Troy will report its Q1 earnings of 2022 before the bell today.

Accolade Inc. (NASDAQ:ACCD -- $52.91) develops and provides technology-enabled solutions that help people to understand, navigate, and utilize the healthcare system and their workplace benefits in the United States. Accolade will report its Q1 earnings of 2022 after the market closes today.

Duck Creek Technologies Inc. (NASDAQ:DCT -- $42.23) provides software-as-a-service core systems to the property and casualty insurance industry in North America. Duck Creek Technologies will report its Q3 earnings of 2021 after the market closes today.

Levi Strauss & Co. (NYSE:LEVI -- $28.04) operates as an apparel company. Levi Strauss will report its Q2 earnings of 2021 after the market closes today.

PriceSmart Inc. (NASDAQ:PSMT -- $87.71) owns and operates U.S. style membership shopping warehouse clubs in Central America, the Caribbean, and Colombia. PriceSmart will report its Q2 earnings of 2021 after the market closes today.

Here is a quick look at how yesterday's earnings announcements played out:

MSC Industrial Direct Co. Inc. (NYSE:MSM -- $90.80) distributes metalworking and maintenance, repair, and operations (MRO) products in the United States, Canada, Mexico, and the United Kingdom. MSC Industrial reported $1.42 earnings per share for the quarter, topping the consensus estimate of $1.37 by $0.05. The company had revenue of $866.30 million for the quarter, compared to the consensus estimate of $848.61 million.

WD-40 Co. (NASDAQ:WDFC -- $255.49) develops and sells maintenance products, and homecare and cleaning products in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. WD-40 reported $1.52 earnings per share for the quarter, topping the consensus estimate of $1.15 by $0.37. The firm had revenue of $136.41 million for the quarter, compared to the consensus estimate of $108.30 million.

Looking ahead to tomorrow, Friday wraps up the week with wholesale inventories on tap.    All economic dates listed here are tentative and subject to change.

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Investors are in the throes of summer, with plenty of red-hot economic activity out next week and another earnings season slowly rolling out, with bank stocks some of the first to release quarterly reports. Earnings from bank names JPMorgan Chase (JPM), Bank of America (BAC), PNC (PNC), Morgan Stanley (MS), and Wells Fargo (WFC) are all due out, while Wall Street can also expect reports from PepsiCo (PEP), Delta Air Lines (DAL), and United Health (UNH). While the week starts slow, by Thursday there will be plenty of economic data to digest, including a monthly report from the Organization of Petroleum Exporting Countries (OPEC), manufacturing data, and weekly jobless claims. The week will be rounded out with data on retail sales and business inventories. 

Below is a list of key market events scheduled for the upcoming week. All economic dates listed below are tentative and subject to change.

The economic calendar will be bare on Monday, July 12. 

Activity will pick up on Tuesday, July 13, with the core consumer price index (CPI), and the Federal budget balance set for release. 

On Wednesday, July 14, the producer price index (PPI) for June, and the latest Beige Book report will be due out. 

Thursday, July 15, will be packed with activity, including a monthly report from OPEC, data on import and export prices for June, the Empire state manufacturing index, the Philly Fed manufacturing index, industrial production data, and another round of weekly jobless claims.  

Friday, July 9, will wrap up the week, with data on retail sales, business inventories, and the consumer sentiment index on tap. 

Hospitality name Hilton Worldwide Holdings Inc (NYSE:HLT), otherwise known as Hilton Hotels, is outperforming the broader market, up 70% year-over-year. What’s more, the security has recently pulled back to its 120-day moving average, which has been a significant trendline over the past couple of years. The equity’s current perch near the $120 level is also roughly six time its initial public offering (IPO) price, while the $117 area has stepped in as a floor since HLT’s post-earnings move above it in February. Bearing all of that in mind, now looks like an ideal time to bet on HLT’s next move higher.

Analysts are still split towards Hilton Hotels stock, leaving plenty of room for upgrades and/or price target hikes going forward. Of the 14 in question, seven carry a tepid “hold” rating, while seven say “buy” or better. Plus, the 12-month consensus target price of $127 is only slightly above the stock’s price.

Meanwhile, short interest is 65% above pre-pandemic levels despite a recent decline, indicating there is still potential for additional short covering. The 8.09 million shares sold short now make up roughly 3% of the stock’s available float, or nearly a week’s worth of pent-up buying power.

An unwinding of pessimism over in the options pits could push Hilton Hotels stock higher, too. This is per the stock’s 50-day put/call volume ratio of 2.05 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 99th percentile of its annual range. Echoing this, the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.17 stands higher than 85% of readings from the past year. In other words, short-term option traders have rarely been more put biased.

Lastly, Hilton Hotel stock boasts attractively priced premiums at the moment. This is according to its Schaeffer's Volatility Index (SVI) of 26%, which stands higher than just 3% of all other readings from the last 12 months. Our recommended call option has a leverage ratio of 7.5, and will double on a 12.8% jump in the underlying equity.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this HLT commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.