Two commentators at Trading Markets select the same topic, about a possible top in oil stocks. Here are the links to the Deron Wagner article and the Gary Kaltbaum article.
In the sector, Holly Corp, HOC has an ominous looking and clean head-and-shoulders top. It shows up best with the six-month chart. HOC options are priced with an implied volatily of 43% for the October strike. Today's price action of a gap lower and a rally, are not the best setup for buying options. Time decay is going to be a factor with the long weekend eating up several days. Another hurricane could spike oil higher, so there is significant risk of shorting vs. buying put options. Looks like a decent short play in terms of sector, and the chart, but now may not be the best time to initiate a position.
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