CVX in Trading Pattern of 52-Week Lows

Market Update: The futures this morning pointed towards a positive day in the markets after another large drop yesterday. The market seems to think that Congress is close to a coronavirus relief deal being passed.

Though we may start off in the green, we are still firmly in a bear market as the major indexes are still around 30% off from their previous highs.

The good news is that even in a bear market, traders can make a profit if they utilize the right strategy.

My PowerTrend system  applies just as well in bearish markets. I shift my focus from bullish call options and call option spreads to bearish put options and put option spreads, but the underlying system remains the same.

Now, let’s beat the bear market and start making money!

Yesterday, we looked at a Daily Price Chart of Blackbaud Inc. and noted that it was showing a ‘sell’ signal after its monthly price is trading below the 10-Month SMA.

Today’s chart is for Chevron Corp. (NYSE: CVX).

Chevron Corporation, through its subsidiaries, engages in integrated energy, chemicals, and petroleum operations worldwide. The company operates in two segments, Upstream and Downstream.

Now, the Daily Price Chart below shows that CVX has been making a series of 52-Week Lows since late January.

chart of the day

When a stock hits a new 52-Week Low, it’s undoubtedly in a very powerful downtrend.

Stocks in a price downtrend, as we know, do not advance in a straight line – there are always price retracements along the way.

CVX experienced periodic price rebounds during its strong decline since January.

Traders can get a lower risk entry point for bearish put purchase trades after a 3 to 5% price rebound as the stock normally resumes its price downtrend after such retracements.

We’ll be sure to continue following Chevron Corp. as it drops to new lows, and watching for price rebounds.

Additionally, we’d like to talk about how a previous Chart of the Day stock has done…

On March 18th, we highlighted Exxon Mobil Inc. (NYSE: XOM), noting that XOM shares had been making a new series of 52-Week lows.

Since March 18th, XOM shares have gone on to drop 14.67%.

If you had purchased the right put option contract, you would be up 76.84% in less than a weeks’ time!

That’s the power of options.

Best Regards,

Chuck Hughes
Editor, Chart Of The Day

Chuck Hughes

Written By Chuck Hughes

Before Chuck Hughes won 10 Trading Championships, he was an accomplished Air Force pilot. In fact, he credits his success as a stock and options trader to his disciplined upbringing and career. When he was deciding between a career in the Navy and a career in the Air Force, the Navy told him he’d only have a 33% chance of flying jets. The Air Force gave him 100%. He liked those odds better. 35 years ago, Chuck had a wife, a young daughter, a son on the way, and a huge mortgage to afford. He didn’t want to give up on his lifelong dream and stop flying for a major commercial airline. He knew he needed to supplement his income during the 15 days a month he wasn’t flying. So he used his experience in discipline and math, and his understanding of finance and the stock markets (which he’d always been interested in,) and opened a $4,600 trading account. He made over $460,000 in profits his first two years of trading, and he hasn’t looked back since. When he was diagnosed with Meniere’s disease 15 years later, which commonly leads to vertigo…He knew his career as a pilot wouldn’t last much longer with those odds. But he didn’t have to scurry to find another gig, or panic about how his family would eat… He’d spent the last 15 years perfecting his system and raking in cash. As an options trader, Chuck does not let his emotions get in the way of his trading strategy. He adheres to disciplined and methodical options and stock trades. Because he respects the options game so highly, and understands the true freedom that financial solvency can bring, Chuck was able to design and refine his system and win those 10 Trading Championships. Put simply, Chuck Hughes’ trading strategies work, and in all types of market conditions. They’ve worked throughout the bull, bear, and flat markets America has seen in the last 30 years. Chuck Hughes has spent that time building a reputation as one of the most trustworthy options traders in the industry. His publishing group Legacy Publishing LLC was one of the few trading groups on the planet to have correctly predicted and profited from the 2008 financial crash .As a published author 16 times over, a 10-time Trading Championship winner, and an options-trading teacher for 25 years, he’s learned to trade and teach without an ego.