XOP trade ideas
Daily XOP stock forecast trend analysis 10-JUL
Price trend forecast timing analysis based on pretiming algorithm of Supply-Demand(S&D) strength.
Investing position: In Falling section of high risk & low profit
S&D strength Trend: In the midst of a rebounding trend of upward direction box pattern price flow marked by limited falls and upward fluctuations.
Today's S&D strength Flow: Supply-Demand strength had a strong buying flow than a flow in falling section.
read more: www.pretiming.com
D+1 Candlestick Color forecast: RED Candlestick
%D+1 Range forecast: 1.5% (HIGH) ~ -0.1% (LOW), 0.6% (CLOSE)
%AVG in case of rising: 2.1% (HIGH) ~ -0.6% (LOW), 1.3% (CLOSE)
%AVG in case of falling: 0.6% (HIGH) ~ -2.3% (LOW), -1.8% (CLOSE)
BULLISHtesting old pullback levels possible reversal , & downtrend followed by Bullish engulfing (accepted)
OPENING: XOP JUNE 21ST 32 SHORT STRADDLEThis is a continuation of a directionally neutral premium selling play (See Post Below) which I've rolled out to June and transformed into a bullish assumption premium selling play.
Here, I'm looking to work it as a quasi-synthetic covered call, with the in the money short put standing in for my stock, and the short call acting as cover. Naturally, it isn't completely accurate to describe it as a "synthetic covered call" because covered calls have no upside risk, and this setup does. A more accurate description would probably be "bullish assumption short straddle."
A true synthetic covered call would be something like a 70 delta short put with no upside risk since many covered calls are in the area of 70-80 net delta long (100 long delta for the stock, 20-30 delta short for the call).
There are a couple of reasons for why I prefer bullish assumption short straddles to in-the-money short puts with covered call metrics: (a) the delta is a little flatter; and (b) you get a little extra sumthin' sumthin' in cost basis reduction by having the short call on. Here, the net delta of the position is around 50,* versus the 70 delta short put/synthetic covered call. As usual, the trade off is the upside risk aspect of the setup, which will have to be managed as any other oppositional setup would in the event that the underlying rips through the short call strike.
In any event, I've collected 2.86 in credits so far, which would mean my cost basis in any shares assigned via the 32 short put would have a cost basis of 29.14 versus 28.98 spot, so it's slightly underwater at the moment.
Like a covered call, I'll look to roll the setup out as a unit when the short call approaches 50% max.
* -- The net delta on the position can be made "shorter" by setting it up closer to at-the-money; "longer" by setting it up farther away. Generally speaking, I like to sell the 25 delta short call and sell the same strike short put, which generally yields delta metrics in the 40-50 net long area, depending on skew.
XOP long setupDespite the terrible fundamentals, I see good money pump to oil exploration market for a while.
1st target is 37.0(Fib 23.6%)
2nd target is 46.3 (Fib 38.2%)
Stop loss@ 31.0 to profit from breakout.
If 31.0 fails, next support is 28.0
OPENING: XOP MAY 17TH 28/33 SHORT STRANGLE... for a 1.03 credit/contract.
Metrics:
Max Profit: $103
Max Loss/Buying Power Effect: Undefined/~3.85
Break Evens: 26.97/34.03
Delta: -6.81
Theta: 1.9
Notes: Going directionally neutral short strangle here with 30-day implied more than twice that of the broad market and giving myself a little room to manage intratrade. Will look to take profit at 50% max (.51).
Waiting for a short on XOP using DRIP. long time coming.XOP has been bullish and grinding higher.
Playing consolidation at lower prices via options and DRIP etf.
Energy and Oil Companies on the move upThe daily chart looks like a possible head and shoulders bottom getting ready to run higher to $33 or $38 if news continues to be bullish with large oil inventory drawdowns and SA need oil prices to be higher.
XOP MAY 17TH 30 SHORT STRADDLE (CONT'D)This is a short straddle that started as a double diagonal. (See Post Below). I've been rolling the short straddle body out to generally at-the-money to take profit and to bring in additional credits. Although implied volatility (31%) is at the low end of its 52-week range, it is more than twice that of the broad market; SPY is at 14%.
So far, I've collected 4.31/contract and will just continue to roll out as profitable opportunities present themselves or -- in the alternative, a side is approaching worthless and/or time is running out on the setup ... .
OPENING: XOP FEB/MARCH 26/31/31/36 DOUBLE DIAGONAL... for a 1.92 per contract credit.
Metrics:
Max Loss on Setup: $308
Max Profit on Setup: $192
Delta: .98
Theta: 2.50
Notes: Another double diagonal, this time in the routinely high implied volatility XOP (currently 35.5%), a la the EEM double diagonal I put on earlier in the trading session. (See Post Below). I've gone shorter duration in the back month than usual in order to pay a bit less for the longs and on the notion that I will, in all likelihood, be adjusting/recentering the long strangle aspect at some point anyhow (oil, after all, can move).
Long live the XOP As of Dec. 26th USOIL has been on a reversal from its 2018 Q4 correction. On Jan 10th we broke through the resistance area of $51.25. The XOP as we all know is directly related to USOIL as it tracks an equal-weighted index of companies in the US oil & gas exploration & production space. The XOP's first resistance area that was broken through was $29.90.
As XOP continued to rise we hit our next level resistance on 1/9/19. Over the last 2 days we've had trouble breaking through the $30.73 mark. According to my charting we have approached the bottom of our 7 day channel. Our 7 day forecast would predict a bounce upward into the $31.34 area. However in the last 2 days we have been creating a rising wedge. We can see a breakout to $31 and up or a breakdown back to $29.73 and below possibly even to $27.50.
Friday Jan 11 Pre Market will tell us a lot about where we go from here.
If XOP has a breakout and move up look for:
Price Tgt 1 - $31.34
Price Tgt 2 - $32.70
If XOP hits resistance and falls look for:
Price Tgt 1 - $29.73
Price Tgt 2 - $27.50
Natural Gas futures have fallen in February while Oil futures are up in February. This could create a lateral movement in the XOP however I'm fairly confident in a Bullish move for the weeks coming up.
TRADE IDEA: XOP FEB/MARCH 25/30 UPWARD CALL DIAGONALMetrics:
Max Loss/Buying Power Effect on Setup: $338/contract
Max Profit on Setup: $162/contract
Break Even: $28.38 versus $28.63 spot
Debit Paid to Spread Width Ratio: 67.6%
Delta: 39.2
Theta: .61
Notes: A bullish assumption shot at the low end of the range. Ordinarily, I like to go split month with these to give me more time to reduce cost basis, but there isn't an April expiry available yet, so going shorter duration (and therefore cheaper). Shooting for 50% max (.81/$81). I'll adjust the trade or cancel it in the a.m. pre-NY open if /CL price is substantially different from where it was at Friday close (48.31).
