If you’ve been long Exxon Mobil Corporation (NYSE:XOM), it’s been a tough start to 2017. But a drilling of XOM stock is now offering attractive value both off and on the Exxon Mobil price chart. And for investors, a modified collar strategy is a smarter way to secure value from XOM’s total return potential. Let me explain.

It’s no secret, the world’s largest energy company, has been a dog for its shareholders thus far in 2017. In fact, Exxon Mobil has been the Dow Industrials worst performer, shedding 9%. And with the venerable index up nearly 6% and an administration-friendly White House in its back pocket, XOM stock’s losses probably feel even worse.

I’ll be the first to admit, I got Exxon Mobil completely wrong in late December. Supports for owning shares, ranging from OPEC and Rex Tillerson have failed to live up their initial billing. The good news is, and as InvestorPlace’s Richard Saintvilus discussed earlier this week, now is a great time to consider buying XOM stock.

The argument for owning Exxon Mobil looks past today’s supply glut and weak prices. Instead, the article rightly focuses on a very well-managed and well-funded energy giant that’s paying investors 3.70% and at a market discount for that ownership.

How about when, not if, conditions do get better for big oil?  The company’s global acquisitions and production projects should pay-off big time for XOM shareholders with an estimated price target of $100 within the next one and one-half years.

And in our view and supported by Exxon Mobil’s price chart, some of Mr. Saintvilus’ more pleasant return of shareholder value could be starting sooner rather than later.

Exxon Mobil Stock Weekly Chart

As confessed above, I was flat out wrong in Exxon Mobil. Also, our buy-write strategy selection was not nearly defensive enough to afford any meaningful protective value.

Nevertheless, I am inclined to see the 10% discount from around $91 to $82 in shares of Exxon Mobil as offering a nice risk-reward proposition for both traders, as well as longer-term investors inclined to average in over time.

From a charting and technical standpoint, Exxon Mobil has established a test of the 50% retracement level. XOM has also confirmed a mirror move or two-step pattern (AB=CD). Further, the second symmetrical (CD) leg has completed with a weekly doji decision-based candlestick.

Considering an oversold stochastics indicator now curling higher after a bullish crossover, the expectation is support should hold and the decision candle, act as an intermediate low in Exxon Mobil shares.

Exxon Mobil Stock Modified Collar Strategy

Given the bullish appraisal for shares, apparent chart support and typically lower volatility, I like the idea of approaching Exxon Mobil with a modified collar strategy. Reviewing the XOM options, and with shares at $82.06, selling the April $85 call, purchasing the April $80/$77.50 put spread and buying shares can be executed for a net debit of $82.14.

The 8 cents of premium paid for this combination beyond what a trader would pay for a standalone stock position in Exxon Mobil affords up to $2.50, or more than 3% of stock protection, below $80 at expiration, if shares fail to hold technical support.

The downside to the insurance offered by the bear put spread is it is limited and is slower to gain value as a full hedge against a decline in Exxon Mobil stock. Considering the fairly sizable price drop already and, generally, lesser and steadier price volatility in shares, this seems to be a nice trade-off versus paying out more for the protective value of a traditional collar.

Investment accounts under Christopher Tyler’s management do not currently own positions in any of the securities or their derivatives mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT.