Chevron Corporation remains a leading entity in the integrated energy sector, overseeing all stages from extraction to retail. On Monday, the stock price increased over 5% with trading volume more than tripling. This was due to new developments in Venezuela, where Chevron benefits from its existing infrastructure.
Technically, Monday’s upward movement pushed the stock above a long-term declining trendline that has been there since the end of 2022. To confirm this breakout, the stock must maintain momentum and close above Monday’s high on Tuesday. If successful, the stock is likely to test the resistance level at $168.96 next.
Potential Breakout and Target Levels
Clearing that resistance will confirm the breakout, switching the old trendline at $159.84 to serve as primary support. Pullbacks to this level could present buying opportunities. This setup suggests a strong trade potential with a target price of $177.35.
However, caution is advised as the Venezuela situation is still developing. Should the stock fall back below the declining trendline, the current upward trajectory would be invalidated.
Given the 5% surge in Chevron’s stock yesterday on January 5th, 2026, we’ve seen a significant spike in short-term implied volatility. This makes buying options more expensive, so traders should approach this with defined strategies. The move was triggered by confirmation that the Venezuelan government has granted Chevron expanded operational control over key joint ventures, a more concrete development than the speculative headlines we saw throughout 2025.
Trading Strategies Amidst Volatility
If we see a close above yesterday’s high, a bullish position is warranted to target the $177.35 level. Given the elevated volatility, we should consider buying call debit spreads, such as the February 2026 $170/$177.50 spread, to cap our cost and risk. This strategy allows us to participate in the upside move toward the target while mitigating the impact of high option premiums.
Should the initial momentum stall and the stock pulls back to the old trendline around $159.84, it presents a different opportunity. This would be an ideal spot to sell cash-secured puts or put credit spreads with a strike price near $160. This allows us to collect the rich premium from the high volatility and defines our entry point at a strong technical support level.
However, we must respect the risk that the breakout could fail, especially considering the political instability we watched in that region last year. A daily close back below the $159 trendline would negate this entire bullish setup. In that case, we would look to exit any long positions and could even initiate bearish positions by buying puts.
This breakout is supported by new projections suggesting the Venezuelan deal could add over 50,000 barrels to Chevron’s daily production by the third quarter of this year. This fundamental boost comes as Brent crude has remained resilient, trading in a stable range above $90 a barrel for the past three months. This provides a much stronger foundation for the current stock move than the OPEC-driven volatility we traded around back in 2024.
