Combined with Trump's unabashed support of the fossil-fuel industry — which includes the dismantling of Biden-era efforts to boost electric vehicle sales — Marathon may have the tools to engineer a comeback.

MPC Stock At A Potential Inflection Point

Since peaking in early April last year, MPC stock has struggled for traction. From early May to late March of this year, MPC's price action has trended along a downward slope. However, the most recent trades have broken above this declining resistance barrier. Quite possibly, MPC has reached an inflection point.

That's a subjective interpretation of market sentiment. An objective observation is that in the past 10 weeks, MPC stock printed a "7-3-U" sequence: seven up weeks (demand accumulation), three down weeks (demand distribution), with a net positive trajectory across the period.

Over the trailing decade, this market breadth sequence has materialized 65 times. In those cases, the following week saw positive price action 66.15% of the time, with a median return of 3.05%. In the near term, it's possible that MPC stock could shoot above the $167 mark. Over the next few weeks, the $170 level would be the next natural target.

What makes this setup attractive for options traders is that, as a baseline, MPC stock inherently offers a bullish advantage. Using price data from January 2019, the chance that a long position in MPC stock will be profitable for any given week is 57.06%. Subsequently, market makers price options to reflect this probabilistic reality.

However, the beauty of the 7-3-U sequence is that the probability following this sequence is 66.15%. Therefore, the options trader is theoretically receiving nine percentage points of favorable odds for free, incentivizing a debit-based strategy.

Extracting A Big Payout Via Call Spreads

For aggressive traders intrigued with the numbers game of MPC stock, the 162.50/165 bull call spread expiring May 30 is awfully tempting. This transaction involves buying the $162.50 call and simultaneously selling the $165 call, for a net debit paid of $125. Should MPC rise through the short strike price at expiration, the maximum reward is also $125, a payout of 100%.

As stated earlier, the 7-3-U sequence generally sees upside materialize in the following week over 66% of the time, with a median return of 3.05%. By mathematical deduction, the projected price should be more than enough to trigger the $165 target on May 30.

Effectively, the aforementioned call spread is favorably mispriced. The big payout partially comes from the fact that while MPC natively enjoys an upward bias, it has struggled for form in the past year. However, market breadth data suggests that the odds are much more conducive to speculation than Wall Street realizes.

Read Next:

• Options Corner: Redfin’s Value Compression Sets The Stage For A Bullish Bounce Back

Photo: Shutterstock