Backtest: Buy CVX at the close when Brent crude closes up at least 1% on the day while...
A 59.2% win rate attached to a losing strategy — that is the tension running through this backtest. The setup is intuitive enough: when Brent closes up at least 1% and Chevron finishes lower anyway, the drop looks stock-specific rather than oil-beta weakness, and the stock should snap back as that gap closes.
Across 49 closed trades, it didn't pay. The strategy returned -5.15% on $100,000 in starting capital, with the worst single trade at -13.38% swamping a best of +4.18%. Over the same window, SPY buy-and-hold returned +85.28%, leaving the rules trailing the benchmark by 90.42 points.
The full trade-by-trade evidence, and what it says about divergence setups like this one, is in the analysis below.
Buy CVX at the close when Brent crude closes up at least 1% on the day while CVX closes down on the day; exit when CVX closes above its 5-day simple moving average or after 5 trading days, whichever comes first. A Chevron down day against a strong crude rally marks stock-specific forced selling rather than oil-beta weakness, so the stock tends to snap back as the divergence closes.
How this was measured
This is a simulated backtest generated from the plain-English strategy below, executed bar-by-bar on historical market data using the price + news data mode with $100,000 starting capital. Strategy: Buy CVX at the close when Brent crude closes up at least 1% on the day while CVX closes down on the day; exit when CVX closes above its 5-day simple moving average or after 5 trading days, whichever comes first. A Chevron down day against a strong crude rally marks stock-specific forced selling rather than oil-beta weakness, so the stock tends to snap back as the divergence closes.
The key numbers
The charts
The takeaway
The strategy returned -5.15% on $100,000 starting capital across 49 closed trades with a 59% win rate. Over the same window SPY buy-and-hold returned +85.28%, so the strategy finished trailing the benchmark by 90.42 points. Best single trade +4.18%, worst -13.38%.
The fine print
- Simulated results on historical data — fills, slippage and costs are idealized.
- Past performance does not predict future results.