DailyPlay – Opening Trade (XOM) – September 24, 2024

XOM Bearish Opening Trade Signal

Investment Rationale

XOM recently broke down below its trading range and has rallied back to its $117 resistance, providing an attractive risk/reward entry for bearish exposure. With revenue decline expected, EPS growth that is inline and Net margins below the industry average, XOM trades at a 13% premium relative to its industry suggesting possible downside. The stock has struggled to break out above 120. In fact, it hasn’t stayed above that level for a substantial amount of time since the end of April.

XOM – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 6 XOM November 1 $120/$125 Call Vertical Spreads @ $154 Credit per Contract.

Total Risk: This trade has a max risk of $2,076 (6 Contracts x $346) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $346 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bearish trade on a stock that is currently bullish and expected to pull back from recent highs.

1M/6M Trends: Bullish/Bullish

Relative Strength: 5/10

OptionsPlay Score: 99

Stop Loss: @ $308 (100% loss to the value of premium)

View XOM Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Monday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View XOM Trade