Despite plunging crude oil futures, Valero Energy Corp. (NYSE: VLO) shares are trading higher today after Citigroup upgraded VLO from hold to buy. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on VLO.

After hitting a one-year high of $78.68 in July, the stock dropped sharply and has been trading mostly in the upper $60's over the past three months. VLO opened this morning at $68.85. So far today the stock has hit a low of $68.81 and a high of $71.90. As of 11:30, VLO is trading at $70.44, up $2.09 (3.1%). The chart for VLO looks bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $60 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just 6 weeks as long as VLO is above $60 at November expiration. Valero would have to fall by more than 14% before we would start to lose money. Learn more about this type of trade here.

VLO hasn't been below $60 since March and has shown support around $68 recently. This trade could be risky if oil prices relax over the next few months, but even if that happens, this position could be protected by strong support between $60 and $65, where the stock bottomed out in August.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in VLO.