LyondellBasell Industries Plunges 9.9%, What’s Next for the Chemicals Giant?

Summary
• LYB collapses 9.9% to $60.56, its lowest since May 2025
• Q2 earnings miss by $0.03 and 7.6% revenue decline trigger panic
• DOW’s 17.55% selloff amplifies sector-wide weakness

LyondellBasell Industries (LYB) is in freefall amid a perfect storm of earnings disappointment and sector-wide collapse. The stock’s intraday range of $63.43 to $60.47 highlights extreme volatility, with the plastics sector reeling from weak demand and macroeconomic headwinds. As DOW leads the selloff with a 17.55% drop, investors face critical questions about LYB’s near-term trajectory and whether the $58.30 support level will hold.

Earnings Miss and Sector Weakness Trigger Sharp Selloff
LyondellBasell’s Q2 earnings report shattered expectations, delivering $0.33 EPS against $0.36 consensus and a 7.6% revenue decline to $7.68 billion. This underperformance, coupled with the broader chemicals sector’s collapse—led by DOW’s 15.33% freefall—ignited panic. The stock’s 28.2x dynamic P/E ratio now appears stretched against its 13.2% return on equity, while its 169.14% dividend payout ratio raises sustainability concerns. Short-term technicals also deteriorate: the 200-day MA at $71.67 is a distant target, and the RSI at 65.11 signals overbought exhaustion.

Plastics Sector in Freefall as DOW Leads the Plunge
The plastics sector is in freefall, with DOW’s 17.55% intraday drop amplifying LYB’s selloff. Both stocks face headwinds from weak demand in plastics and refining, exacerbated by the Federal Reserve’s hawkish stance. LYB’s 52-week range of $51.11–$100.46 now appears vulnerable to a breakdown below its 30-day MA at $61.41. The sector’s beta of 0.82 (LYB) and 1.2x leverage (DOW ETF) highlights divergent responses to macro risks.

Bearish Options and ETF Plays in a Deteriorating Setup
• 200-day MA: $71.67 (far above current price)
• RSI: 65.11 (overbought, bearish reversal likely)
• MACD: 1.52 (bullish signal fading)
• Bollinger Bands: 57.04–67.66 (current price near lower band)

Short-term traders should target key levels: the 58.33 support (30-day MA) and 75.86 resistance (200-day MA). The LYB20250815P60 put option (strike $60, IV 41.33%) and LYB20250815C65 call (IV 45.52%) are top plays. Here’s why they stand out:

• LYB20250815P60 Put:
- Code: LYB20250815P60
- Delta: -0.41 (moderate bearish exposure)
- IV: 41.33% (mid-range)
- Leverage: 30.60% (high)
- Turnover: 63,844 (liquid)
- Gamma: 0.061 (responsive to price swings)
- Theta: -0.086 (rapid time decay)
- Why: This put benefits from a 5% downside scenario (target $58.30) with 30%+ leverage and high gamma to amplify gains as LYB dips.

• LYB20250815C65 Call:
- Code: LYB20250815C65
- Delta: 0.31 (moderate bullish bias)
- IV: 45.52% (attractive)
- Leverage: 46.36% (high)
- Turnover: 214,407 (extremely liquid)
- Gamma: 0.050 (responsive to rallies)
- Theta: -0.023 (moderate decay)
- Why: This call offers 46% leverage for a 5% rebound to $64.40, with high IV and turnover ensuring liquidity in a volatile environment.

Action Alert: Aggressive bears should buy LYB20250815P60 ahead of the 58.33 support test. Bulls with high risk tolerance may scalp LYB20250815C65 if the stock bounces above $64.40.

Backtest Lyondellbasell Industries Stock Performance
Lyondellbasell (LYB) has a strong track record of recovering from intraday plunges of -10% or more. The backtest data shows that after such events, LYB tends to exhibit positive returns over various time frames, with the 3-Day win rate at 49.59%, the 10-Day win rate at 50.58%, and the 30-Day win rate at 53.87%. This indicates that LYB is likely to bounce back after a significant intraday decline, making it a resilient investment option for those looking to capitalize on such market fluctuations.

Immediate Action Required as LYB Faces $58.30 Support Test
LyondellBasell’s selloff shows no immediate signs of abating, with the $58.30 support level acting as a critical inflection point. A breakdown below this would validate a bearish reversal, aligning with the sector’s collapse. Watch DOW’s -17.55% move as a sector barometer. For LYB, key triggers include the $58.30 support and $64.40 resistance. Short-term traders should prioritize the LYB20250815P60 put for aggressive downside exposure, while longs should wait for a confirmed bounce above $64.40. With the RSI at 65.11 and MACD diverging, volatility is far from over. Act now: Buy LYB20250815P60 if $58.30 breaks, or consider LYB20250815C65 for a rebound above $64.40.