4 Trade Ideas for Chevron: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Chevron, $CVX, started higher out of consolidation at the start of the year. Three days later it had finally retraced the pandemic drop and kept going to a top in mid-January. It dropped back to retest the pre-pandemic price level and held, reversing higher. It comes into the week in a short consolidation at the all-time high. The RSI is strong in the bullish zone with the MACD flat but positive.

The Bollinger Bands® are pointing higher. There is no resistance above 139.50 but he 138.2% extension of the retracement of the pandemic drop comes at 150. There is support at 135.50 and 130 then 126.50. Short interest is low at 1.2%. The stock pays a dividend with an annual yield of 4.09% and begins trading ex-dividend on Tuesday. The company is expected to report earnings next on April 28, 2022.

The February options show largest open interest at the 145 strike above and then the 130 below on the put side. On the call side it is massive at the 135 call. In the March options the there is a plateau from 90 to 130 and then very large size at 135 on the put side. On the call side it is large and focused from 125 to 145. The May options are the first to cover the next report and show biggest open interest at the 125 put strike and from 125 to 140 on the call side, but these are just starting to build.

Chevron, Ticker: $CVX

Trade Idea 1: Buy the stock on a move over 140 with a stop at 135.

Trade Idea 2: Buy the stock on a move over 140 and add a March 135/125 Put Spread ($2.75) while selling the May 155 Call ($2.30).

Trade Idea 3: Buy the March/May 145 Call Calendar ($2.95) and sell the April 125 Put ($2.20).

Trade Idea 4: Buy the May 125/140/150 Call Spread Risk Reversal (15 cent credit).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into February options expiration week, saw equity markets showed weakness with an ugly finish Thursday and Friday.

Elsewhere look for Gold to continue to rise in consolidation while Crude Oil trends higher. The US Dollar Index continues to drift to the upside while US Treasuries pullback. The Shanghai Composite looks to continue to consolidate while Emerging Markets continue to trend lower.

The Volatility Index looks to remain elevated and biased higher putting a roadblock in the path of equity markets chances of moving to the upside. Their charts look weak, especially on the shorter timeframe, with the QQQ leading the SPY to the downside, but the IWM holding. On the longer timeframe the IWM is also outperforming with the QQQ looking worse than the SPY. Use this information as you prepare for the coming week and trad’em well.

 

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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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