Chevron, $CVX, dropped from a high in January finding support a week later but 15% lower. It bounced from there to a lower high in May and then started a slow drifting trend lower. That made a lower low in December. Since then it has moved higher. In the middle of March it broke falling trend resistance but stopped short of making a higher high. It pulled back under that trend line and then reversed to end last week back at the prior top.
It comes into the week with a RSI moving higher in the bullish zone with the MACD turning to cross up and positive. There is resistance at 126.80 and 127.50. A move over that would make for a higher high and longer timeframe trend reversal. Then it is found at 128.50 and 130.30 before 133.80. Support lower comes at 122.85 and 121.10 before 119.50. Short interest is low under 1%. The stock pays a 3.77% annual yield dividend and went ex-dividend February 14th. The company is expected to report earnings next on April 26th before the market opens.
The April options chain shows the biggest open interest at the 120 and 125 put strikes. On the call side it is twice as big at 120 and then double again at 125 with good size at 130. The April 26 Expiry options, covering the earnings report, have smaller open interest focused from 115 to 124 on the put side and slightly larger from 125 to 133 on the call side. The at-the-money straddle shows an implied $4.50 move by expiration. The May options chain shows large open interest at the 120 put and then much lower at 80 and 85. On the call side the open interest is focused from 125 to 140.
Chevron, Ticker: $CVX
Trade Idea 1: Buy the stock on a move over 126.80 with a stop at 122.80.
Trade Idea 2: Buy the stock on a move over 126.80 and add an April 26 Expiry 126/122 Put Spread ($1.30) while selling a May 130 Call ($1.30) to pay for it.
Trade Idea 3: Buy the April 26 Expiry/May 130 Call Calendar (65 cents) and sell the April 26 Expiry 120 Put (45 cents) to help pay for it.
Trade Idea 4: Buy the May 120/130 bullish Risk Reversal (15 cents).
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 as the 2nd Quarter begins saw there was no sell off in equities, rather a gap and go week showing strength.
Elsewhere look for Gold to continue to consolidate while Crude Oil remains in an uptrend. The US Dollar Index looks to mark time next week while US Treasuries pullback in their uptrend. The Shanghai Composite and Emerging Markets are back in their uptrends.
Volatility is very low and looks to continue there, keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts show the SPY and QQQ now looking like strong uptrends with the IWM turning up to join them. Use this information as you prepare for the coming week and trad’em well.
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.