Top Opportunity Dissected – $CVX Breaking News Contra Play

Just after 11am EST, $CVX headline hit that their “huge Kazakh oil expansion may be delayed to 2025” causing the stock to fall fast on volume to intraday lows.


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These big moves always catch my attention – vertical price action, heavy volume spikes, massive bar expansions. These are all characteristics of a capitulation reversal setup.

This wasn’t an A+ set up but it still had most of the variables needed for me to trade it:

  • Massive volume spike – on the 2min it was trading around 35k volume per candle that spiked to 654k at the peak, 18x the volume.
  • Sharp price movement – moved away very quickly from MAs and VWAP
  • Wide range bars – average 2min bar was doing 20-30cents, this move jumped to $1.31 price move
  • First green candle had the most volume of the move indicating a turn was happening

What I didn’t like about it:

  • The entry candle covered a lot of ground back, reducing the EV back to VWAP. Would have preferred another candle down that closed near lows of the previous candle around 139.75ish.
  • Wasn’t a huge move on the daily – still within normal trading ranges.

Trade management is pretty straightforward. Buy the break of the prior bar high, stop lod. You can do this on either the one minute or two minute time frames. I watch both of them very closely when the move is happening. The one minute can provide some false signals, but it can also get you in at a much better price.

For instance, on the one minute my entry was around $140.44, while if I took the 2 min entry it would have been around $140.75. Big difference.

One thing about this setup that is unique and something you don’t see very often is this move pushed prices below a heavily consolidated area and broke 52-week lows as you’ll see below.

Often times when something like this happens you will get a full reversal. It flushed out all the stops below the 52-week lows, then reversed hard and hasn’t looked back yet.

I didn’t fully realize this when the trade was happening otherwise I would have left some on in case a full reversal did play out.

Having scanners is a must for these types of setups. They happen quick and you have to be ready to rock and roll when they show up.