Downgrade Sends Chevron Stock to Lowest Level In Months

Call buying has been notably popular on CVX

Sep 6, 2018 at 2:05 PM
facebook twitter linkedin

Chevron Corporation (NYSE:CVX) is down 3% at $115.42, following a downgrade to "neutral" from "buy" at BofA-Merrill Lynch. The brokerage firm also cut its price target to $135 from $150, citing a number of reasons it sees growth slowing for the company, including expiring contracts in the coming years. This price action has CVX stock set for its lowest close since early April, sending it far below recent support from the 320-day moving average.

chevron stock chart

Even though the equity is now down 7.7% year-to-date, most analysts have kept their bullish recommendations. By the numbers, 11 of the 14 covering brokerages have "buy" or better ratings on CVX. Moreover, the average 12-month price target is $146.37, a nearly 27% premium to current levels. It would seem the equity is vulnerable to more bearish analyst attention going forward.

Going off this, sentiment has also been bullish in the options pits. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day call/put volume ratio of 2.67. Not only does this mean call buying has almost tripled put buying in recent weeks, but the reading ranks in the highest quartile of its annual range, showing that such a preference for calls is rare.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners