4 Trade Ideas for Marathon Oil: Bonus Idea

• Posted by Greg Harmon
• on October 16th, 2023

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

Marathon Oil, $MRO, comes into the week breaking resistance in a Cup and Handle. The target out of the pattern is a move to 34.50. The Bollinger Bands® have widened to allow a move and appear to be opening higher now. The RSI is rising into the bullish zone with the MACD crossing to positive as it rises. There is resistance at 28.25 and 29.25 then 31.25 and 32.50 before going back to 2014 to find it at 34 and 35.50 then 37 and 38. Support lower is at 27.50 and 26.75 then 26. Short interest is low at 2%. The stock pays a dividend with an annual yield of 1.43% and has traded ex-dividend since August 15th.

The company is expected to report earnings next on November 1st. The October options chain shows biggest open interest from 25.50 to 23 on the put side and spread from 26 to 30, biggest at 26, on the call side. The November 3 Expiry chain, covering the earnings report, is light on open interest outside of the 25.50 strike on the call side. The November chain has biggest open interest at the 22 strike on the put side and the 27 and 24 strikes on the call side. Finally, the January chain has biggest open interest at the 22 then 20 put strikes, and on the call side at the 27 strike then 22 and 30.

Marathon Oil, Ticker: $MRO

Trade Idea 1: Buy the stock on a move over 28.25 with a stop at 26.75.

Trade Idea 2: Buy the stock on a move over 28.25 and add a November 3 Expiry 27/25.50 Put Spread (40 cents) while selling the January 35 Call (40 cents).

Trade Idea 3: Buy the November 3 Expiry/January 30 Call Calendar ($1.10) while selling the November 26 Put (55 cents).

Trade Idea 4: Buy January 24/30/35 Call Spread Risk Reversal (45 cents).

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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 the heart of earnings season, saw equity markets show early strength but get spooked at the end of the week, giving up most or all of their gains.

Elsewhere look for Gold to continue its possible reversal to the upside while Crude Oil drives higher as well. The US Dollar Index looks to continue to move to the upside while US Treasuries settle in their uptrend. The Shanghai Composite looks to continue lower while Emerging Markets consolidate over long term support.

The Volatility Index looks to remain low but with a bias higher, making the path more difficult for equity markets to the upside. Their charts look weak on the shorter timeframe with late week reversals from lower highs continuing short term downtrends. On the longer timeframe both the QQQ and SPY are holding in bullish ranges with momentum gauges reset and ready to move back higher. The IWM continues in consolidation on that timeframe though. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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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