As oil prices climb above $80 for the first time since late last year, energy stocks are roaring back with strength across multiple timeframes. As we review the energy sector, SLB stands out as a stock where value can be unlocked by the current environment. We’ll review an options trade to play the name. Despite a record year in 2023, SLB (SLB) traded lower this year on the back of geopolitical factors. The recent rise in oil prices is bringing investors back and, in my opinion, now is another opportunity to add SLB to your overall portfolio. If we look at a longer-term chart of SLB, we see that it continues to form a series of higher highs and higher lows and recently we bounced off this bullish trendline. Zooming in, we see that SLB has traded around the $54 level as a major support and resistance. And yesterday, SLB broke above this important level as resistance, which now becomes our new support. The upside target would align with the all-time highs in the low $60s. As we evaluate the business, we know that SLB is the largest services and equipment provider for oil and gas exploration. And as breakevens in offshore oil decline to the low $40s, SLB is set to capture a large percentage of the Capex spending on these projects over the next couple of years. And at only 15 times forward earnings, it trades at a discount relative to its own history. With a strong pipeline and strong free cash flow generation, I believe SLB should be trading back towards the upper end of its valuation history, putting the stock price closer to its $62 52-week highs. The trade Despite implied volatility on SLB at the very bottom of its 52-week range, I still believe that the best trade structure for this trade would be buying a call vertical. I believe that the upside above the low $60s is limited for now, and using a vertical spread would reduce my risk by nearly a third. I’m going out to May and buying the $55/$60 call vertical at a $1.66 Debit. This means that I’m: Buying the May $55 Calls @ $2.45 Debit Selling the May $60 Calls @ $0.79 Credit Paying a total of $166 per contract. This strategy will risk $166 per contract if SLB is below $55, while potentially capturing $344 in profits if SLB is above $60 at expiration. DISCLOSURES: (None) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.