Phillips 66 Plunges 2.97%: What’s Brewing Before Earnings?

Summary
• Phillips 66 (PSX) trades at $124.05, down 2.97% from its $127.85 close
• Intraday range: $122.72–$127.00, with 2.5M shares traded
• Earnings report looms on July 25, with projected EPS of $1.63 (29.4% YoY drop)
• Technical indicators signal short-term bearish momentum despite long-term consolidation

Phillips 66’s sharp intraday selloff has captured market attention as it approaches its earnings report. The stock’s 2.97% decline—its lowest since the 2020 pandemic—coincides with a sector-wide bearish outlook for integrated energy firms. With diesel margins driving Q2 gains but earnings projections still lagging, investors are bracing for a volatile earnings week. Technicals and options activity suggest a high-stakes pivot point as the stock tests key support levels.

Earnings Disappointment Fears and Sector Headwinds Collide
Phillips 66’s intraday collapse reflects a collision of three forces: 1) a projected 29.4% YoY EPS decline to $1.63, 2) a sector-wide bearish outlook for integrated energy companies amid macroeconomic volatility, and 3) historical earnings volatility. Analysts warn of a 63% chance of a post-earnings drop, with median declines of 2.5%. The stock’s short-term technicals—MACD histogram turning negative, RSI at 52.82, and a 200-day MA at $121.28—suggest continued pressure. Meanwhile, sector peers like Exxon (XOM) and Chevron (CVX) are bucking the trend with positive intraday moves, highlighting Phillips 66’s unique earnings-driven vulnerability.

Options Playbook: Capitalizing on Earnings Volatility and Technical Breakdowns
• MACD: 1.805 (bullish divergence), Signal Line: 2.343 (bearish), Histogram: -0.537 (negative momentum)
• RSI: 52.82 (neutral but weakening)
• Bollinger Bands: $134.46 (upper), $126.02 (middle), $117.58 (lower)—price near lower band
• 200-day MA: $121.28 (key support), 30-day MA: $124.73 (current price near 30D MA)
• Support/Resistance: 30D support at $119.01–$119.33, 200D support at $126.03–$126.95

Phillips 66 is trapped in a bearish technical setup as it approaches its earnings report. Immediate support lies at the 200-day MA ($121.28) and the 30-day support zone ($119.01). A breakdown below $122.72 (intraday low) could trigger a test of $117.58 (Bollinger lower band). Short-term traders may consider the PSX20250801P124 put and PSX20250801C121 call for directional bets on a volatile earnings week.

Top Option 1: PSX20250801P124
• Contract Code: PSX20250801P124 (Put)
• Strike: $124.00, Expiration: 2025-08-01
• IV: 35.23% (moderate), Leverage: 45.94%, Delta: -0.4845 (moderate bearish exposure), Theta: -0.0858 (decaying time decay), Gamma: 0.0580 (responsive to price swings), Turnover: 6,103 (high liquidity)
• This put offers a 45.94% leverage ratio with a delta near -0.5, ideal for a 5% downside scenario (target price $117.85). If PSX breaks below $122.72, the put could gain 17.76% in implied value.

Top Option 2: PSX20250801C121
• Contract Code: PSX20250801C121 (Call)
• Strike: $121.00, Expiration: 2025-08-01
• IV: 35.14% (moderate), Leverage: 27.57%, Delta: 0.6843 (moderate bullish exposure), Theta: -0.1877 (aggressive time decay), Gamma: 0.0519 (price-sensitive), Turnover: 14,319 (high liquidity)
• This call balances leverage (27.57%) with a delta near 0.7, offering upside if PSX rebounds above $126.03 (200D MA). A 5% upside to $130.25 could trigger a 15.71% gain in implied value.

If PSX breaks below $122.72, PSX20250801P124 offers a high-conviction short-side play. Aggressive bulls may consider PSX20250801C121 for a potential bounce above $126.03.

Backtest Phillips 66 Stock Performance
The backtest of the Philippine Stock Exchange (PSX) after a -3% intraday plunge shows favorable short-to-medium-term performance. The 3-Day win rate is 53.00%, the 10-Day win rate is 54.89%, and the 30-Day win rate is 57.29%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 5.98%, which occurred on day 59, suggesting that there is potential for a strong recovery following a significant pullback.

Earnings Week Pivot: Secure Your Position Before the Storm
Phillips 66’s 2.97% drop ahead of earnings reflects a market bracing for a historically bearish report. While the stock’s technicals point to a short-term breakdown risk, its long-term range-bound profile suggests volatility could be temporary. Investors should monitor the 200-day MA ($121.28) and 30-day support ($119.01) for directional clues. With sector leader Exxon Mobil (XOM) up 0.72%, energy investors have mixed signals to weigh. For now, short-term traders should prioritize options like PSX20250801P124 and PSX20250801C121 to capitalize on the earnings-driven volatility. Watch for a breakdown below $122.72 or a surprise earnings beat to dictate the next move.