Oil and gas stocks could extend the rally
Antero Resources stock also offers affordable options
Oil and Gas Name Stocks Antero Resources Corporation (NYSE: AR) are down 2.4% to trade at $30.85 at last check, after hitting a near seven-year high of $32.62 yesterday, with support from its 20-day moving average coming into play at the beginning of February. AR is now showing a 76.5% year-to-date lead and has grown more than 200% in the last 12 months. Even better, there are reasons to believe that the AR could continue to climb in the weeks to come.
Specifically, this recent spike comes against the backdrop of historically low implied volatility (IV), which has already been a bullish combination for Antero Resources stock. According to data from Schaeffer’s senior quantitative analyst, Rocky White, there have been five other times in the past five years when the stock has traded within 2% of its 52-week high, while its Schaeffer Volatility Index (SVI) was in the 20th percentile. of its annual range or less. This is now the case with AR’s SVI of 59%, which is in the relatively low 17th percentile of its 12-month range.
White’s data shows that a month after these signals, security was higher, with an impressive average return of 14.2% for this period. From its current perch, a move of a similar magnitude would put Antero Resources stock at just over $35 per share, an area the stock hasn’t crossed since June 2015.
A short press could also keep the wind at AR’s back. Short interest has increased 14.2% over the past two reporting periods, and the 25.59 million shares sold short now represent 9.3% of the stock’s available float.
An unraveling of pessimism in option wells could send stocks even higher. Schaeffer’s Open Put/Call Interest Ratio (SOIR) is in the high 97th percentile of its annual range. In other words, short-term options traders have rarely been more put-oriented.
Moreover, fairness is Schaeffer Volatility Dashboard (SVS) is 89 out of a possible 100. This means that Antero Resources’ stock has managed to beat volatility expectations over the past year – a boon for options buyers.