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Today, we’re opening a new bearish trade on National Oilwell Varco, Inc. (NYSE:NOV). Oil inventories were released again yesterday, and the market-moving news in the data is a build in gasoline. The weekly change showed a build in gasoline of 1.5 million barrels, while crude oil inventories fell by 1 million barrels.
This shifts a trend that had been emerging over the last several weeks, and it is very bad news for the sector. With U.K. indices already selling off following the announcement of “Snap” elections on Tuesday, we think this is a good time to open a bearish position on energy.
NOV has just broken lower from a “triple top,” and we expect momentum to take the stock back to support at $32 before earnings next week.
‘Buy to open’ the NOV May 36 Puts (NOV170519P00036000) for a maximum price of $1.60.
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