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Trade of the Day: National Oilwell Varco, Inc. (NYSE:NOV)

This week’s gasoline build is bad news for the energy sector

   

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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.

InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news.

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Article printed from InvestorPlace Media, http://investorplace.com/2017/04/trade-of-the-day-national-oilwell-varco-inc-nyse-nov/.

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