Correction over jump on Exxon

Exxon (Ticker: XOM) has made an incredible turnaround 


The oil and gas company is up 50% since its October low …


Plus, Morningstar gives XOM a 5-star rating … and puts the current price ($46.06) at a 39% discount from fair value ($74).


So, after a nice pull back from overbought territory (see graph below) …


It’s time to put a tiger in your tank.

What you have to love about Exxon is they refused to cut their dividend during 2019/2020 when oil prices tanked …


Now, check out expectations for the next two years …



It mostly due to their cutting costs and holding back a bit of capital investment …



Here Is the Trade I did:

I purchased a 47.5/52.5 Call Spread for $150, which is my maximum loss with $500 as my maximum profit …


You get a nice 3.3 to 1 reward to risk and I chose a July-19 expiration to be in play for an infrastructure spending package in Q2 …



Bring it Home

It is really important to stay with the longer-term game plan and look for opportunities to take advantage of corrections as your entry point for trades …


I love the energy sector and have been waiting for Exxon to pull back a bit …


I have my eye on a couple of other energy names and will highlight them in future posts.

Have a great day and as always …


Live and Trade With Passion My Friends,

Griff


DISCLAIMER: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. The materials presented from Option Pit LLC are for your informational and educational purposes only. Neither Option Pit LLC nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational and educational purposes intended is at the user’s own risk.
DISCLAIMER: OPTION PIT LLC IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER. Option Pit LLC is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented materials. Specific trading ideas or strategies discussed in the presentations or materials are entirely illustrative and do not constitute the solicitation of a transaction (or transactions) or a recommendation to execute a particular transaction or implement a particular trading strategy.
DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.