Weekend Trader Series
October 16, 2022
Open Positions Update
- Close the Livent Corporation (LTHM) January 20, 2023, 25-strike call on Monday, October 17. Close the position at a limit price within the range of the current market price when you place the order.
The following is this week's recommendation:
Chevron (CVX)Place a limit order to buy the Chevron (CVX) December 16, 2022 140-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, October 14, this option was offered at $24.00. CVX closed at $160.14 on Friday, October 14.Do not attempt to enter this position after Monday's close.Please use the following guidelines to manage the position:- Exit the position if the option is at a 100% gain from your entry price.
- If the option has not reached its target profit by 3:00 p.m. Eastern time on Monday, November 14, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Oil & gas giant Chevron (CVX) found support at its 12-month moving average during last months pullback, a trend that preceded strong rallies in early 2021 and late July of this year. Now above a short-term trendline connecting lower highs since early June, CVX looks poised to add to its 37% year-to-date gains.
Shorts built their positions from late June into early September, and that short interest is now rolling over. Plus, there is still plenty of pessimism amongst analysts despite the stock’s outperformance, leaving room for upgrades. Of the 30 analysts in coverage, 12 carry a “hold” or worse rating.
Furthermore, now looks like a good time to weigh in on CVX with options, per the stock’s Schaeffer’s Volatility Scorecard (SVS) of 91 out of 100. This means Chevron stock has exceeded options traders’ volatility expectations over the last year.
Our recommended December 140 call has a leverage ratio of 5.4 and will double in value on a 17% pop in the underlying shares.
Most Recent Recommendations
The information contained herein is intended solely for the individual subscribers, is not intended for institutional investment organizations, and is not legal to be rebroadcast. Please click here for full disclaimer details.
Limitation on Schaeffer's Investment Research (SIR) liability: SIR liability, whether in contract, tort, negligence, or otherwise, shall be limited in the aggregate to direct and actual damages not to exceed the fees received by SIR from Subscriber. SIR will not be liable for consequential, incidental, punitive, special, exemplary or indirect damages resulting directly or indirectly from the use of or reliance upon any material provided by SIR. Without limitation, SIR shall not be responsible or liable for any loss or damages related to, either directly or indirectly, (1) any decline in market value or loss of any investment; (2) a subscriber's inability to use or any delay in accessing SIR website or any other source of material provided by SIR; (3) any absence of material on SIR website; (4) SIR failure to deliver or delay in delivering any material or (5) any kind of error in transmission of material. SIR and Subscriber acknowledge that, without limitation, the above-enumerated conditions cannot be the probable result of any breach of any agreement between SIR and Subscriber.