Southwestern Energy Company (NYSE:SWN) has been charting a steady path higher in recent months, with the shares up roughly 28% from their mid-November low of $35.44. Highlighting the oil-and-gas concern's forward progress has been its 50-day moving average, which has served as a springboard for SWN throughout 2014. The equity is once again consolidating around this rising trendline, after tagging a two-year high of $49.16 on April 23, suggesting now might be an opportune time to bet on the stock's next leg higher.
However, sentiment around the Street paints a rather grim picture toward an equity that's put in a solid outperformance against the broader S&P 500 Index (SPX) over the past three months. In the options pits, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.27 ranks in the 92nd percentile of its annual range. Simply stated, puts have been bought to open over calls with more rapidity just 8% of the time within the past year.
A number of these put buyers have targeted the June 45 strike, which houses peak put open interest in the back-month series of options. In the near term, this underfoot level could serve as options-related support for SWN, as the hedges related to these bets begin to unwind over the next six weeks.
Elsewhere, no fewer than 18 of the 26 covering analysts maintain a "hold" or "sell" suggestion toward the stock, and the consensus 12-month price target of $47.32 stands at a slim 4.3% premium to the equity's current perch at $45.36. Should any of these analysts follow in the footsteps of RBC or Barclays -- which both raised their price targets for SWN within this past week -- the stock could find a fresh burst of buying power.
Those looking to gamble on additional upside for shares of Southwestern Energy Company (NYSE:SWN) may consider purchasing the in-the-money September 40 call, which was last asked at $6.40. The area just north of this round-number strike served as a firm foothold during the equity's late-February pullback.
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