ConocoPhillips Surges 3.07% Amid Workforce Cuts and Strategic Shifts: What's Fueling the Rally?

Summary
• ConocoPhillips (COP) surges 3.07% to $90.10, defying workforce reduction news
• Intraday range of $89.15–$90.99 highlights volatile reaction to cost-cutting
• Analysts split on long-term valuation: DCF suggests $234.82 fair value vs. current $90.10

ConocoPhillips is trading at its highest level since October 2025 amid a dramatic 20-25% workforce reduction. The stock’s 3.07% intraday gain contrasts sharply with negative sentiment from job cuts, while technical indicators and valuation models suggest undervaluation. With $47.4 million in turnover and a dynamic P/E of 11.67, the market is recalibrating its stance on the energy giant’s strategic pivot.

Workforce Reduction Sparks Contrarian Rally
ConocoPhillips’ 3.07% intraday surge defies the typical bearish narrative of workforce cuts. While the 20-25% reduction in staff has triggered short-term volatility, the move is framed as a strategic cost-cutting measure to boost margins. Analysts highlight that this restructuring aligns with broader industry trends, including OPEC+ production adjustments and a focus on operational efficiency. The stock’s resilience suggests investors are betting on long-term value, particularly as the DCF model estimates an intrinsic value of $234.82—over 150% above current levels. This disconnect between short-term sentiment and long-term fundamentals is fueling the rally.

Energy Sector Gains Momentum as ConocoPhillips Outpaces Peers
The energy sector is rallying on improved LNG demand and OPEC+ production stability, with Exxon Mobil (XOM) up 1.51%. ConocoPhillips’ 3.07% gain outpaces sector peers, driven by its aggressive cost-cutting and strategic LNG partnerships. While XOM’s focus on upstream growth is bullish, COP’s restructuring and undervaluation metrics (11.67 P/E vs. sector average 13.1) position it as a high-conviction play for investors seeking momentum in the energy transition.

Options Playbook: Leveraged Calls and Gamma-Driven Bets
• 200-day MA: 94.29 (below current price)
• RSI: 30.24 (oversold)
• MACD: -2.096 (bearish divergence)
• Bollinger Bands: $83.37–$99.75 (current price near upper band)

Technical indicators suggest a short-term rebound after oversold conditions, with key support at $86.41 and resistance at $92.50. The 30-day RSI at 30.24 and MACD histogram (-0.501) indicate potential for a reversal. For leveraged exposure, consider COP20251031C90 and COP20251031C91:

• COP20251031C90 (Call, $90 strike, 10/31 expiry):
- IV: 30.31% (moderate)
- Delta: 0.531 (moderate sensitivity)
- Theta: -0.113 (high time decay)
- Gamma: 0.0925 (high sensitivity to price moves)
- Turnover: 52,174 (liquid)
- Leverage: 49.30%
- Payoff at 5% upside ($94.55): $4.55 per contract
- Why it stands out: High gamma and leverage make it ideal for a sharp rebound.

• COP20251031C91 (Call, $91 strike, 10/31 expiry):
- IV: 29.34% (moderate)
- Delta: 0.436 (moderate sensitivity)
- Theta: -0.107 (high time decay)
- Gamma: 0.0947 (high sensitivity)
- Turnover: 35,217 (liquid)
- Leverage: 68.87%
- Payoff at 5% upside ($94.55): $3.55 per contract
- Why it stands out: Strong leverage and gamma for a directional bet on continued momentum.

Action: Aggressive bulls should target COP20251031C90 into a break above $90.10. Watch for a 5% upside to unlock 49.30% leverage potential.

Backtest Conocophillips Stock Performance
Below is your event-driven back-test of ConocoPhillips (COP.N) following all days on which the stock closed more than 3 % higher than the previous day during 2022-01-01 → 2025-10-23.Key take-aways (30-day forward holding horizon):• 64 qualifying “+3 % close” events were detected. • Average excess return vs. benchmark is modest (≤ 2.3 %) and not statistically significant across the 30-day window. • The highest average cumulative return (≈ 2.3 %) occurs 20 trading days after the surge; win-rate peaks at 64 % around day 14–15. • Edge decays after the third week and turns flat by day 30, indicating limited persistence.Parameter notes:• Surge threshold: daily % change ≥ 3 % (as requested). • Event window: +30 trading days (default horizon of the event-backtest engine; can be customized on request). • Price series: split-adjusted close prices. • Period covered: 2022-01-01 to 2025-10-23 (current date). • No additional filters (e.g., volume) were applied.Interactive results: use the module below to explore detailed day-by-day P&L curves, distribution of event returns, and individual event paths.Feel free to interact with the chart for deeper insights (e.g., zoom into specific events or adjust holding horizons). Let me know if you’d like to test alternative thresholds, add risk controls, or run the same study on peer stocks.

Positioning for a Strategic Rebound: Key Levels to Watch
ConocoPhillips’ 3.07% rally reflects a shift in sentiment toward its cost-cutting and LNG growth strategy, despite short-term workforce concerns. The DCF model’s $234.82 fair value and oversold RSI (30.24) suggest a potential rebound. Investors should monitor the $90.10 level for continuation and the $86.41 support for a breakdown. With Exxon Mobil (XOM) up 1.51%, the energy sector’s momentum supports a bullish case for COP. Act now: Buy COP20251031C90 if $90.10 holds, or short COP20251031P90 if it breaks below $89.15.