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Swing Trade Idea (PSX) – August 17th, 2023

Our bearish trade for Thursday, August 17th is Phillips 66 (PSX). PSX is part of the Energy Sector, which has performed at -1.86% over the last week, with PSX performing at -1.01% over the same period. 

The Energy Sector (XLE) is pulling back as it traded into the top of a trend channel, while PSX is pulling back from a key resistance area at around $117. As this is a counter-trend trade, we expect PSX to therefore continue this move to lower levels over the duration of this trade, with the next area of support at around $108 and then $100.

As a close, if PSX were to trade above $117 for multiple days, this would invalidate our analysis and we will consider cutting losses on the trade. We will also consider cutting losses on this options trade if the value of the vertical spread moves above $5.70.