Chevron stock pulled back to a historically bullish trendline
The shares of oil and gas stock Chevron Corp (NYSE:CVX) still sport a fractional year-over-year lead, despite pulling back over the last two weeks. In fact, going back to May 13, CVX's only win was a 1% gain on May 17. While the security is pacing for its second consecutive weekly loss, investors may have a potential "buy on the dip" situation on their hands.
That's because this recent pullback has Chevron stock trading within one standard deviation of its 260-day moving average, a trendline with historically bullish implications. Per Schaeffer's Senior Quantitative Analyst Rocky White, the security saw four similar signals over the past three years, after which it was higher one month later 75% of the time, averaging a 7.6% gain. A move of similar magnitude would put CVX nearly $170, or its highest level since October 2023.
An unwinding of pessimism amongst options traders could provide the shares with tailwinds. This is per CVX's Schaeffer's put/call open interest ratio (SOIR) of 0.97 that stands higher than 90% of readings from the past 12 months.
Options are reasonably priced at the moment too, for those that wish to speculate on Chevron stock's next move. This is per the security's Schaeffer's Volatility Index (SVI) of 17%, which sits in the low 15th percentile of its annual range. This means options traders are pricing in low volatility expectations at the moment.