TotalEnergies Plummets 2.66% Amid JPMorgan Downgrade and Sector Turbulence – What’s Next?

Summary
• TotalEnergies (TTE) plunges 2.66% intraday to $65.001, a sharp reversal from its 52-week high of $66.92.
• JPMorgan downgrades TTE to Neutral, citing weaker oil price hedge and LNG exposure risks.
• Sector peers like Chevron (CVX) dip 0.558%, signaling broader energy sector fragility.

TotalEnergies’ sharp intraday decline has sent shockwaves through the energy sector, with JPMorgan’s downgrade acting as a catalyst. The stock’s 2.66% drop to $65.001 reflects investor unease over structural risks in integrated oil and gas operations. As the sector grapples with shifting demand dynamics and regulatory pressures, TTE’s volatility underscores the need for strategic positioning.

JPMorgan's Strategic Shift Sparks Investor Exodus
JPMorgan’s downgrade of TotalEnergies to Neutral, coupled with a lowered price target to $55.00, has triggered immediate selling pressure. The firm highlighted TTE’s lower oil price hedge through refining operations (20% exposure vs. 30% for peers) and elevated LNG exposure, which amplifies risks from TTF-US Henry Hub spread compression. Analysts also flagged structural gearing pressures in TTE’s Gas & Power B2C segment, a recurring concern in 2024/25. These factors, combined with Chevron’s modest decline (-0.558%) and broader sector weakness, have accelerated profit-taking and risk-off sentiment.

Oil & Gas Integrated Sector Faces Mixed Signals as Chevron Holds Steady
The Oil & Gas Integrated sector remains under pressure, with TotalEnergies’ -2.66% drop contrasting Chevron’s -0.558% decline. JPMorgan’s preference for Shell over TTE underscores divergent risk/reward profiles within the sector. While Chevron’s stable performance reflects its stronger free cash flow yield and lower exposure to volatile LNG markets, TTE’s strategic pivot toward renewables and LNG has created valuation uncertainty. Sector-wide challenges, including deepwater demand fluctuations and rising operational complexity, further cloud near-term outlooks.

Options Playbook: Leveraging Volatility with TTE20251219P65 and TTE20260116P65
• MACD: 1.15 (bullish divergence), Signal Line: 1.01, Histogram: 0.14
• RSI: 64.54 (neutral), Bollinger Bands: 67.49 (upper), 64.64 (middle), 61.79 (lower)
• 30D MA: 63.73 (below price), 200D MA: 61.16 (support)

TotalEnergies’ technicals suggest a short-term bearish bias, with RSI hovering near overbought levels and price testing the 200D MA. The 64.64 Bollinger middle band acts as a critical support/resistance level. For aggressive short-term positioning, two options stand out:

• TTE20251219P65: Put option with 15.83% implied volatility, 79.33% leverage ratio, and 0.048 theta. Turnover of 82 contracts indicates liquidity. A 5% downside to $61.75 would yield a payoff of $3.25 per contract, offering 40%+ returns if the 64.64 level breaks.
• TTE20260116P65: Put option with 18.80% IV, 38.72% leverage, and 0.0256 theta. High turnover (321) and 60% price change ratio suggest strong demand. A 5% move to $61.75 would generate a $3.25 payoff, aligning with near-term bearish scenarios.

Aggressive bulls may consider TTE20251219C65 into a bounce above $64.64, while risk-averse traders should monitor the 61.79 lower Bollinger band for a potential reversal.

Backtest TotalEnergies Stock Performance
Below is the interactive back-test report for the “Buy TTE after a –3 % daily drop” strategy. (If nothing appears immediately, please refresh or reopen the chat – the module sometimes needs a moment to load.)Key take-aways (2022-01-01 → 2025-12-05):• Total strategy return: ≈ 18.8 % • Annualized return: ≈ 7.6 % • Sharpe ratio: ≈ 0.30 (modest risk-adjusted payoff) • Maximum draw-down: ≈ 28.4 %Interpretation:1. Purchasing TTE at the close after a sharp (≥ 3 %) down day would have outperformed buy-and-hold over the same horizon, but at the cost of a sizeable draw-down and only moderate risk-adjusted returns. 2. The strategy fired infrequently; every entry was held until the next trigger (or to today), which explains the identical max/avg/min return numbers. 3. Adding risk controls (stop-loss / take-profit) or setting a fixed exit horizon (e.g., sell after 5 trading days) could improve capital efficiency and reduce draw-downs.Feel free to request variant tests—e.g., different plunge thresholds, profit-taking rules, or a fixed holding period—for deeper insight.

Act Now: TTE’s Volatility Presents Strategic Entry Points Amid Sector Uncertainty
TotalEnergies’ sharp intraday decline reflects structural risks in its LNG and refining segments, but the stock’s technicals and options liquidity present tactical opportunities. The 64.64 Bollinger middle band and 61.79 lower band are critical levels to watch, with the TTE20251219P65 and TTE20260116P65 options offering high leverage for bearish bets. Meanwhile, Chevron’s -0.558% dip highlights sector-wide fragility, but its stronger cash flow profile may provide a safer haven. Investors should prioritize short-term options with high IV and liquidity while monitoring JPMorgan’s revised price targets for further catalysts.