Chevron Post Earnings Watch

Chevron, $CVX, reports earnings before the bell Friday morning and heads into the report with a very positive looking chart. The weekly view below shows that it is approaching the all time highs from March near 110. It has technical indicators that support a move higher as well. The options market is pricing in a move of about $2.60 cents Friday, and if it is to the upside this will trigger a breakout. Look for 115 as the next stop. As an aside the 3-box reversal Point and Figure chart carries a price objective of 121. That is some big upside for such a large cap name. Based on the pace of the current run up expect it to take until September for this to happen. You can lay out the $110 or as a better strategy look to buy the September 110 Calls, which were offered at $2.00 late Thursday. Look to reduce the cost by also selling the September 97.50 Puts, bid at 91 cents, for a low cost entry with about a 50 delta.

If the move is to the downside, all bets are off and expect a test of the 100 area as support and failure there to fall back to support at 96.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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