Buying CVX

Buying CVX

Buy to open' the CVX March 135 Call for a maximum price of $1.98

 

Today, we're closing our bullish trade on Costco Wholesale. While we have only been in this trade for two days, the stock has made a sizeable move to the upside (nearly 2% today) and the combination of the size and the speed of the move have given us not only a positive Delta response to our option premium because of the bullish movement of the underlying stock but also a positive Vega response with an increase in implied volatility. These two factors have combined to create a strong profit in our position, and with the market showing signs of a potential short-term consolidation, we think this is a great opportunity to take our profits off the table. We recommend closing this trade today. Congratulations on a great two-day trade.

We're also opening a new bullish trade on Chevron (CVX). CVX has an earnings announcement coming up on Friday, Feb. 2, before market open, and we think the stock is primed to break out of the consolidation range it is in, either in the run up to, or in the aftermath of, the earnings announcement.

Oil prices continue to climb higher. WTI crude prices crossed $66 per barrel earlier today, and while CVX has yet to respond to the positive move during the past three days, we fully expect it to eventually move higher. The stock started to consolidate and pull back slightly at the same time crude oil prices hit a recent high just below $65 and started to pull back, and now that crude prices have resumed their climb, it's only a matter of time before CVX follows suit.

Chevron (CVX) common stock was trading for approximately $130.77 per share at the time of this alert.