All eyes have been glued to oil prices lately, with the commodity racing toward multi-year highs and taking many energy and oil names with it, notes Lillian Currents, an analyst with Bernie Schaeffer's financial newsletter organization, Schaeffer Investment Research.
While a surprise rise in U.S. crude inventories has put a lid on this rally today, the sector is still worth monitoring as investors head into October.
One name in particular, is Marathon Petroleum Corp. (MPC). The stock has more than doubled in the past 12 months, and the recent sector surge put the security back within a chip shot of its June 10 annual peak of $64.84.
While the equity has pulled back today, almost every major moving average is still holding as potential support on the charts, including the 180-day moving average, which contained several pullbacks during the past few months.
On top of a promising technical setup, MPC just showed up on Schaeffer's Senior Quantitative Analyst Rocky White's list of 25 stocks that have averaged the highest returns in October, going back 10 years. This data shows MPC ending the month higher 90% of the time, and averaging a 7.2% return.
This is good for the fifth best return, while Marathon stock is the only oil & gas producer on the list. A similar move from its current perch would put MPC at a fresh annual high, just above the $66 mark.
For those wanting to speculate on MPC's next move with options, now looks like an ideal time. Marathon stock's Schaeffer's Volatility Index (SVI) of 36% stands higher than just 16% of readings from the past year, while its Schaeffer's Volatility Scorecard (SVS) sits at an elevated 69 out of a possible 100.
This implies that options trader are pricing in relatively low volatility expectations for MPC, and that the stock tends to exceed said expectations.