Implied volatility in Chevron
In this article, we’ll consider Chevron (CVX) stock’s price forecast range for the 16 days leading up to its earnings based on its implied volatility.
This stock price forecast will be based on the current level of implied volatility in Chevron. The company will post its first-quarter earnings results on April 26, 2019.
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Implied volatility in Chevron has fallen 0.3 percentage points since March 8, 2019, to the current level of 18.6%. During the same period, Chevron stock has risen 3.2%.
Expected price range for Chevron stock
Considering Chevron’s implied volatility of 18.6% and assuming a normal distribution of prices (using the bell curve model) and a standard deviation of one (with a probability of 68.2%), Chevron stock could close between $120.6 and $130.4 in the 16 days that end on April 26, 2019.
Peers’ implied volatilities
The implied volatility in Petrobras (PBR) has fallen 0.4 percentage points since March 8 to its current level of 36.3%. The implied volatilities in YPF (YPF) and Suncor Energy (SU) have fallen 5.7 percentage points and 1.0 percentage points, respectively, in the same period. YPF’s and Suncor’s implied volatilities currently stand at 34.9% and 22.6%, respectively.
The stock prices of Petrobras, YPF, and Suncor have risen 13.4%, 16.7%, and 1.4%, respectively, since March 8. Thus, in the past month, these integrated energy companies’ implied volatilities and stock prices have moved inversely.