Chevron Revs Its Engine

 | Dec 02, 2012 | 10:30 AM EST
  • Comment
  • Print Print
  • Print
Stock quotes in this article:


Today I'll get a bit more specific on a Chevron (CVX) setup I'm watching, and it starts with the weekly chart.

Chevron (CVX) -- Weekly
Source: Dynamic Trader

Chevron is currently rallying from a support decision of between $98.85 and $100.81. This zone includes the coincidence of a 0.618 retracement of one swing, a 0.786 retracement of another and the 100% projection of a prior $17.72 decline. The actual low was made at $100.66 on Nov. 15.

Since reaching that low, the stock has seen a rally of $6.03. Note that, if the price remains above this key price area, the upside potential for a bigger-picture rally comes in way above the current level -- at the $123.39 area. But the mere fact that there is a target does not mean the stock will get there. It is something to shoot for if the rally does indeed continue from the recent low.

So how should you enter a trade now with these parameters in mind? Let's take it down to a lower time frame to refine the risk, and look at the 30-minute chart.

Chevron (CVX) -- 30-Minute
Source: Dynamic Trader

Now, if the last low in this stock is any good, I would like to see the bullish pattern remain intact -- which, in my view, would mean holding above the $102.76 swing low identified on this intraday chart.

Two areas of support come in above this prior low. The first zone is between $104.77 and $105.27. This would provide for a more aggressive entry, since you would have to risk more. The second zone, and the one I would prefer to wait for, comes in between $103.53 and $104.39. This zone has better "symmetry" support, but that does not mean it will get there.

The bottom line is that, as long as the price holds above one of these areas in Monday's session and I see some favorable activity to follow, I'll be looking at a bullish options strategy in Chevron, with my risk defined below the $102.76 low. If that level is taken out, I will back off the buy side until further notice.

For more information about trades and triggers, please refer here.

Columnist Conversations

What ISN'T this company doing? Continues to dominate -- nice set of deals unveiled overnight.
The futures are up slightly this morning as traders buy yesterday's junk. As noted in last night's Strategy Se...
Equifax's (EFX) CEO is being replaced today in response to the data breach incident. Trading in the shares ...
TheStreet's Scott Gamm has Jordan Belfort on-camera today. Any questions you may have for the Wolf of Wall Str...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.