We discussed surging airline stocks in Thursday’s edition of this newsletter, and today I’d like to dig into some energy stocks that have been piquing my interest lately — especially Chevron (CVX) and Exxon Mobil (XOM).
The Energy sector has had its fair share of volatility, and while earnings season often brings added uncertainty, it’s exactly this kind of environment where risk-defined trades can pay off.
Chevron is my first target.
If CVX hits the $140 level, I’m looking to initiate a trade — specifically, a bull call spread or a credit spread. Now, here’s why $140 stands out to me…
Technically speaking, that’s where I see a strong support level developing, which could give us a favorable bounce. For those of us not wanting to jump into full ownership, these options strategies are ideal.
By using a bull call spread, for instance, I’m keeping the risk defined, allowing me to take a position with limited downside while capturing any potential move back up. And honestly, for a stock with Chevron’s pedigree, $140 is a price level I’m comfortable with.
Exxon Mobil (XOM) is a bit more nuanced…
XOM is currently trading in the middle of a range, and while it’s a high-quality name, I don’t see enough volatility to trade both directions around earnings. Instead, I’m planning to watch for a pullback — if XOM trades down toward $108, that’s where I’d like to set up another bull call spread.
Again, the idea here is simple: capture a defined risk play at a technical level where a bounce is more probable. It’s a safer approach for times when we’re less certain about an earnings catalyst but want to keep an eye on the upside potential.
The reason for leaning into risk-defined trades right now is pretty clear — earnings can bring wild swings, especially in a sector so impacted by global events and price volatility.
With this strategy, the exposure stays contained, allowing me to set up solid plays without being tied to full ownership, which comes with its own set of complications. Big energy names like CVX and XOM don’t lack in liquidity or tradable setups, and when they’re at or near key levels, it’s just about waiting for that entry signal.
Chevron and Exxon aren’t just strongholds in the energy sector — they’re reliable, heavily traded stocks. And in an earnings environment where the market’s weighing everything from supply chain issues to global demand, it’s about having patience for these kinds of defined-risk trades.
If either Chevron finds support around $140 or Exxon edges down closer to $108, I’ll be ready to move. Until then, it’s on the radar.
In markets like these, where fundamentals and technicals both play their part, disciplined entries around technical support levels can lead to gains — or at the very least, we’ve set ourselves up to manage risk in a big way.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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