Valero Energy Surges 9.86%: What's Fueling This Explosive Move?

Summary
• Valero Energy (VLO) rockets 9.86% to $181.61, piercing its 52-week high of $185.62
• Sector leader Marathon Petroleum (MPC) gains 6.34%, but VLO outpaces peers with 9.86% rally
• Options frenzy: 2026-01-09 $185 call option sees 111,491 turnover, 304.65% price surge
Valero Energy’s 9.86% intraday surge has ignited a firestorm in the oil & gas refining sector. With the stock trading at $181.61—just $4 shy of its 52-week high—market participants are scrambling to decipher the catalyst. The move coincides with a sector-wide rally, though VLO’s performance dwarfs even its sector leader Marathon Petroleum. Technical indicators and options activity suggest a high-conviction bullish play is unfolding.

Technical Breakout and Options Volatility Drive VLO’s Surge
Valero Energy’s 9.86% rally is driven by a technical breakout above key resistance levels and explosive options activity. The stock has pierced the 30-day moving average of $170.28 and the 200-day average of $147.37, confirming a long-term bullish trend. The RSI at 34.12 suggests oversold conditions are reversing, while the MACD (-2.42) remains below its signal line (-2.34), indicating momentum is building. Options data reveals a frenzy in out-of-the-money calls, particularly the $185 strike expiring Jan 9, which has seen 304.65% price gains and 111,491 contracts traded.

Oil & Gas Refining Sector Rally: Valero Outpaces Marathon Petroleum
While the oil & gas refining sector is in rally mode, Valero Energy’s 9.86% surge far outpaces Marathon Petroleum’s 6.34% gain. The sector’s strength likely stems from broader energy market optimism, but VLO’s technical breakout and options frenzy suggest a distinct catalyst. Marathon’s more moderate move indicates sector-wide momentum, but Valero’s performance highlights its role as a breakout leader in the refining space.

High-Leverage Call Options and ETF Positioning for VLO’s Breakout
• 200-day average: $147.37 (well above)
• RSI: 34.12 (oversold reversal)
• MACD: -2.42 (building momentum)
• Bollinger Bands: $177.32 (upper), $167.39 (middle), $157.46 (lower)
Valero Energy’s technicals paint a bullish breakout scenario. The stock is trading above all major moving averages, with RSI suggesting a reversal from oversold territory. The $185 strike call option (VLO20260109C185) and $187.50 strike (VLO20260109C187.5) stand out for their high leverage ratios (95.24% and 154.66%) and moderate deltas (0.33 and 0.24).
• VLO20260109C185: Call, $185 strike, Jan 9 expiry, IV 41.59%, leverage 95.24%, delta 0.33, theta -0.478973, gamma 0.041340, turnover 111,491
• VLO20260109C187.5: Call, $187.50 strike, Jan 9 expiry, IV 40.77%, leverage 154.66%, delta 0.24, theta -0.379449, gamma 0.035712, turnover 61,968
Both options offer high leverage with reasonable implied volatility. The $185 call benefits from high gamma (0.0413) and moderate delta, making it responsive to price swings. The $187.50 call’s 154.66% leverage ratio could amplify returns if the stock breaks above $187.50. A 5% upside to $190.69 would yield $5.69 profit on the $185 call and $3.19 on the $187.50 call. Aggressive bulls may consider VLO20260109C185 into a breakout above $185.

Backtest Valero Energy Stock Performance
The backtest of VLO's performance following a 10% intraday increase from 2022 to now shows a significant strategy return of 120.16%, with a benchmark return of 42.97% and an excess return of 77.19%. The strategy's CAGR is 22.27%, indicating strong growth over the period. However, the high volatility of 37.23% and a maximum drawdown of 0.00% suggest that while the strategy has delivered strong returns, it has also come with considerable risk.

Valero Energy’s Breakout: Hold for $185 Break or Consider High-Leverage Calls
Valero Energy’s 9.86% surge is a technical and options-driven breakout with high conviction. The stock’s proximity to its 52-week high and the $185 call option’s liquidity suggest momentum could extend. Key levels to watch include the $185 strike and the 200-day average of $147.37. Marathon Petroleum’s 6.34% gain underscores sector strength, but VLO’s options frenzy indicates a distinct catalyst. Investors should hold long positions for a potential $185 breakout or consider the VLO20260109C185 call for leveraged exposure. Watch for a breakdown below $177.32 or regulatory reaction to sustain the move.