Marathon Petroleum Plummets 3%—Is This the Bottom or a Sector Sell-Off Prelude?

• MPC shares crash to $175.18, slicing $4.68 off Monday’s open.
• Wolfe Research downgrades to 'Peer Perform,' triggering profit-taking.
• Sector leader Valero (VLO) mirrors decline, down 2.5%, amid refining margin concerns.
• Technicals show 30-day support at $167.07 and resistance at $177.50.

Marathon Petroleum’s sharp selloff marks its lowest point since mid-June, with institutional selling and analyst downgrades creating a volatile backdrop. The stock’s 2.6% intraday drop to $175.18—its lowest since June 19—has traders bracing for a potential breakdown below $165 or a rebound toward $180.

Wolfe Research Downgrade Sparks Profit-Taking
The 3% plunge stems directly from Wolfe Research’s downgrade to 'Peer Perform,' stripping MPC of one of its last 'Outperform' ratings. Despite 13 analysts retaining buy/hold ratings with a $184.38 average target, the downgrade triggered a wave of profit-taking from short-term holders. Institutional selling, including New York State Retirement’s 7.9% stake reduction, amplified downward pressure. Even though MPC reported an EPS beat and strong renewable diesel margins, year-over-year revenue contraction and elevated debt levels fueled skepticism about its near-term trajectory.

Oil Refiners Stumble as Demand Concerns Linger
MPC’s decline aligns with broader sector weakness, as Valero (VLO) mirrors its 2.5% drop. Both face headwinds from refining margin volatility and geopolitical crude flows. While MPC’s stronger 200-day moving average (151.69 vs. VLO’s 129.30) offers deeper technical support, the sector’s reliance on Venezuelan tariff dynamics and diesel demand growth remains unresolved. Traders are now watching VLO’s $55.78 level—a breakdown could drag MPC further toward $160.

Betting on Volatility: MPC’s Top Options for Near-Term Moves
• 200-day MA: $151.69 (critical support anchor)
• RSI: 69.64 (neutral-bullish)
• Bollinger Bands: Lower at $159.43 (near-term floor)

Traders should focus on $165 support and $180 resistance as key battlegrounds. Short-term pessimism favors bearish plays into $165, while bullish reversals demand a close above $177.50 (30-day resistance).
Top Picks:
1. MPC20250718P170 Put (Strike: $170):
- IV: 36.27% | Leverage: 207% | Delta: -0.20 | Theta: -0.033 | Gamma: 0.037 | Turnover: 2,926
- Why: High liquidity and 207% leverage make this ideal for betting on a slide toward $165. A 5% downside to $165.71 yields $4.29 intrinsic value.
2. MPC20250718C175 Call (Strike: $175):
- IV: 25.47% | Leverage: 66.7% | Delta: 0.58 | Theta: -0.67 | Gamma: 0.074 | Turnover: 9,082
- Why: This in-the-money call offers asymmetric reward/risk for rebounds above $177.50, with 66.7% leverage amplifying gains.
Action Hook: Short the $170 put aggressively if $167.50 breaks—target $160 by week’s end. Bulls: Accumulate $175 calls if $172.72 (30DMA) holds.

Backtest Marathon Petroleum Stock Performance
The backtest of Morgan Stanley Capital International (MPC) after an intraday percentage change of less than -3% shows favorable performance metrics. The 3-Day win rate is 52.81%, the 10-Day win rate is 53.51%, and the 30-Day win rate is 54.04%. Although the maximum return during the backtest period is only 0.34% on day 29, the overall trend suggests that MPC tends to recover modestly following a significant intraday plunge.

Hold the Line at $165 or Face a Sector Sell-Off?
Marathon Petroleum’s fate hinges on whether $165 support holds amid refining margin pressures. The $170 put’s liquidity and leverage make it the optimal short-side play, while $175 calls offer asymmetric upside for rebounds. Watch Valero’s $55.78 level—a sector breakdown could drag MPC deeper toward $150. Traders must stay nimble: this is a trap for bulls and a buying opportunity at $160. Monitor 7/18 options expiration and institutional flows for critical clues on the next move.