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Energy stock Marathon Petroleum Corp. (MPC) was recently seen trading at a new all-time high, observes Jake Scott, technical expert and deputy editor at Schaeffer Investment Research.

Over the last 12 months, MPC added 88.6% and already stands more than 15% higher in 2023. Bullish traders shouldn't let their foot off the gas, though, as the stock has recently flashed a historically bullish signal. The stock's highs often come amid historically low implied volatility (IV) — a bullish combination in the past.

Per data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been four similar times during the past three years when the equity was within 2% of a 52-week high while its Schaeffer's Volatility Index (SVI) sat in the 20th annual percentile or lower. MPC's SVI of 34% stands higher than just 14% of readings from the past year. 

The stock averaged a 5.5% return after 67% of those signals. What's more, the equity's Schaeffer's Volatility Scorecard (SVS) sits at an elevated 80 out of a possible 100. This implies the equity has exceeded option traders' volatility expectations during the past year.

An unwinding of pessimism in the options pits could also fuel tailwinds. The stock's 50-day put/call volume ratio of 0.96 at the International Securities Exchange, Cboe Options Exchange, and NASDAQ OMX PHLX stands higher than 96% of annual readings.

So while calls outpace puts on an overall basis, the appetite for bearish bets has rarely been healthier over the last 12 months.

About the Author

Jake Scott is an assistant editor for Schaeffer's Investment Research. Along with his normal writing duties, Mr. Scott helps oversee Schaeffer's Facebook page. His writing has been featured in both Forbes and Cincinnati Magazine, with the latter highlighting his time in medical journalism. Mr. Scott holds a bachelor's degree in journalism from the University of Cincinnati.

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