DVS Energy Special | Five High-Torque Setups
When I say “energy”, I don’t just mean oil and gas. It’s the whole stack: conventional oil, natural gas, refiners, and yes, even “weirder” niches like helium. Long-time readers will know there are two small helium names I’ve been flagging since I launched DVS in late July; both have treated us very kindly so far.
From early Q4 onwards I started shifting more attention toward oil and natural gas. Structurally, I’ve been bullish crude from ~55 USD and we’ve had one oil name tucked inside the Core 15 that’s quietly done its job. A name I’ve mentioned publicly as well – LCX / Lycos Energy – has basically doubled from where I first highlighted it, and paid a chunky dividend along the way.
Below you’ll find the XLE chart (State Street Energy sector ETF). The picture is pretty simple: multi-month base, breakout, and now the big caps are starting to front-run what crude itself is only just beginning to confirm.
In parallel, CL (light crude futures) has been grinding through roughly two weeks of consolidation and, as I type this, is finally breaking higher from that range. That move points toward the 70 area, which also lines up with a key breakout level on the monthly crude chart. In other words: the tape is starting to play ball with the structural thesis we’ve been discussing for months.
Out of that broader energy universe I’ve done a lot of digging – fundamentals, multi-timeframe charts, and “torque vs. quality” trade-offs – and narrowed it down to what I see as the five best setups right now for an “energy convexity sleeve”.
In this free section I’ll walk through #5 on that list: PBF Energy.
The remaining #4 to #1 will be available to contributing subscribers, with full battle cards, charts, and context.
If you find this kind of work useful and want the full picture, you can always choose to support the channel and unlock the rest – completely up to you.
How to use these ideas (stocks vs. calls)
You can absolutely just buy these stocks outright and treat them as medium-term positions inside a broader commodity bucket.
If you want a bit more torque without playing with futures leverage, you can also layer in call options on top of a stock position (or even instead of stock) – a small “convexity sleeve” per name. Think of it as:
Stocks = the engine
Calls = the turbo
For the five names in this energy sleeve, the kind of structures I’m personally looking at are along the lines of:
6–12 month expiries
20–35% out-of-the-money strike ranges, depending on the name
Premium sized so that, across all five, I’m only putting a low single-digit % of portfolio at risk in option premium
These are examples only of how I think about structuring; I don’t know your situation, your time horizon or your risk tolerance. This is not advice or a signal service. My goal is to give you the tools and the framework so you can fish for yourself – not to press the buy button for you.
For readers who want to go a level deeper on the trading side: there’s an existing Substack section plus a soon-to-launch Discord channel where contributing subscribers can ask follow-up questions around risk, sizing, scaling in/out, etc. I’ll also be putting out a “Trading 101” primer in the coming weeks, in the same spirit as the Junior Mining 101 – A quick primer for new readers piece.
Housekeeping / disclaimers
For context: the bulk of this piece – including the (vast majority of the) charts – was written over the weekend of 7–8 February. All charts are end-of-day snapshots from the Friday close, so if you’re reading this later, please always cross-check against the latest price action.
Especially for contributing subscribers: once you head into the next section, please always read this and other Substack posts on the app or desktop, not inside the email notification. There’s a hard limit to what I can embed in the email itself, so images and extra sections often won’t show up in your Gmail / Outlook client. When you get a new-post notification, give me 10–15 minutes to finish uploading all charts and text on Substack, then read it in the app or via the website to make sure you see the full picture.
#5 | PBF Energy (refiner torque in the energy sleeve)
PBF is grinding higher inside a big rising channel, but it’s now ramming straight into a confluence of resistance around 35–38 (trendline + prior highs). As long as 31–32 holds, path of least resistance is still up, but best RR is on pullbacks rather than chasing into this wall.
From here we climb one step up the ladder. Let’s move to #4 in the energy convexity stack.