TotalEnergies Plunges 2.75%—Is a Bearish Breakout Brewing?

Summary
• TotalEnergies (TTE) trades at $60.66, down 2.75% intraday, with a 52-week range of $52.78–$70.50
• Q2 earnings report highlights $6.6B cash flow amid 10% oil price drop
• Options market shows heavy put activity ahead of August 15 expiration
• RSI at 43.1 suggests oversold conditions, but bearish momentum persists

TotalEnergies faces a sharp selloff despite robust cash flow and production growth, as macroeconomic fears and oil glut warnings weigh. The stock’s 2.75% drop reflects broader sector jitters and technical bearishness, with key support levels under pressure.

Lower Oil Prices and Looming Glut Trigger Sharp Selloff
TotalEnergies’ 2.75% decline stems from a combination of falling oil prices and a warning of an impending oil supply glut. Despite reporting $6.6 billion in cash flow for Q2—driven by 3% hydrocarbon production growth—the company flagged a 10% drop in oil prices and OPEC+ production unwind as key headwinds. The earnings report, while strong on operational metrics, emphasized a 'volatile' market environment with prices fluctuating between $60–$70/b. This bearish outlook, paired with weak refining margins and LNG price declines, has triggered profit-taking and risk-off sentiment, accelerating the selloff.

Integrated Oil & Gas Sector Volatile as TTE Trails Peers
The integrated oil & gas sector remains fragmented, with TotalEnergies underperforming sector leaders like Exxon Mobil (XOM), which rose 0.75% intraday. While TTE’s Q2 cash flow of $6.6B was resilient, sector-wide concerns about overcapacity in refining and petrochemicals persist. XOM and Chevron (CVX) continue to benefit from Permian Basin production and LNG demand, but TTE’s exposure to LNG price declines and weak refining margins has left it lagging. The sector’s bearish technicals—reflected in a 4.27x EV/EBITDA multiple—highlight structural challenges despite TotalEnergies’ operational strength.

Options and Technicals Signal Aggressive Short-Term Plays
• 200-day MA: 60.26 (near price) • RSI: 43.1 (oversold) • MACD: -0.105 (bearish) • Bollinger Bands: 60.58–63.38 (price near lower band)

Technical indicators suggest a short-term bearish setup, with key support at 60.58 and resistance at 63.38. The RSI’s oversold condition could trigger a rebound, but bearish momentum remains intact. Two options stand out for aggressive short-term positioning:

• TTE20250815P60 (Put, $60 strike, Aug 15):
- IV: 18.82% (moderate) • Delta: -0.41 • Theta: -0.0357 • Gamma: 0.135 • Turnover: 3,792
- Payoff: $0.34 gain if price drops to $57.50 (5% downside). High leverage (69.68%) and liquidity make this ideal for a bearish breakout.

• TTE20250815C60 (Call, $60 strike, Aug 15):
- IV: 19.81% • Delta: 0.58 • Theta: -0.0038 • Gamma: 0.129 • Turnover: 2,434
- Payoff: $0.12 gain if price bounces to $62.50. High delta and moderate IV offer directional exposure if RSI rebounds.

Aggressive bulls may consider TTE20250815C60 into a bounce above $62.50, while bears should watch the 60.58 support level. If $60 breaks, TTE20250815P60 offers short-side potential.

Backtest TotalEnergies Stock Performance
The backtest of TSP's performance after an intraday plunge of at least -3% shows favorable results. The 3-day win rate is 53.90%, the 10-day win rate is 52.88%, and the 30-day win rate is 54.24%. Although the returns are modest, with a maximum return of 1.36% over 30 days, the consistency of positive outcomes suggests the strategy could be viable for investors looking to recover from significant dips.

Act Fast as TotalEnergies Faces Key Support Test
TotalEnergies’ 2.75% drop reflects a bearish technical setup and macroeconomic headwinds, with the 60.58 support level critical for near-term direction. While the company’s operational metrics remain strong, oil price volatility and sector overcapacity threaten further declines. Watch the 60.58–63.38 range and consider TTE20250815P60 for a breakdown trade. Sector leader Exxon Mobil (XOM, +0.75%) shows resilience, but TTE’s leverage to LNG and refining risks makes it a high-conviction short-term play. Investors should prioritize liquidity and gamma exposure in options to navigate the coming volatility.