It's been a strong month for oil prices amid rising geopolitical tensions between U.S. and Iran, with crude futures pacing for a June gain of more than 11%, when comparing front-month contracts. This has created tailwinds in the energy sector, with HollyFrontier Corp (NYSE:HFC) and Marathon Petroleum Corp (NYSE:MPC) two names in particular boasting impressive monthly returns. And this positive price action could continue in the near term, if history is any guide.
HollyFrontier Set to Snap Monthly Losing Streak
After bottoming at an 18-month low of $37.73 on May 31, HollyFrontier stock has added 15.9% so far in June, last seen up 1.7% at $44.61. The energy stock is headed for its first monthly win since January and its biggest monthly return since May 2018 -- and more upside could be in store.
According to Schaeffer's Senior Quantitative Analyst Rocky White, HFC has been one of the best stocks to own on the S&P 500 Index (SPX) in July, looking at data over the past decade. Specifically, the shares have averaged a July gain of 8.11% over the last 10 years, with 100% of the returns positive.
A continued rebound could shake some of the weaker bearish hands loose. While 90% of analysts maintain a "buy" or "strong sell" rating, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.21 ranks in the 79th annual percentile -- signaling an unusual put-skew among short-term traders. A round of upgrades and/or an unwinding of the hedges related to these put options could create tailwinds for HFC.
Najarian Call Out Boosts Marathon Petroleum Stock
Marathon Petroleum hit its annual low of $45.47 on May 31, but has since jumped 18% to trade at $53.78. Today's 4.7% pop -- sparked by Jon Najarian's call out on CNBC's "Halftime Report" -- puts MPC stock on track for its first close north of its 50-day moving average since April 10.
What's more, the energy stock boasts a 100% July win rate, going back to 2009. The shares have averaged a monthly gain of 6.46%, and another move of this magnitude would have MPC heading into August above the $57 per share mark, based on its current perch.
Some of today's options traders are targeting more upside for MPC shares. Amid accelerated call volume -- the 24,000 contracts traded is 1.6 times the expected intraday amount -- buy-to-open activity has been detected at the weekly 7/5 57-strike call. By doing so, call buyers expect Marathon Petroleum to topple that $57 level by the close next Friday, July 5.