3 Energy Stocks That Could Inspire After Easter

Apache Corporation (APA), Cabot Oil & Gas Corporation (COG), and Chesapeake Energy Corporation (CHK) have historically outperformed in the week after Easter

Mar 23, 2016 at 3:39 PM
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Earlier today, Schaeffer's Senior Quantitative Analyst Rocky White took a look at 25 stocks that have historically outperformed in the week following Easter. If you read the analysis, you may have noticed a number of energy stocks on the list. Building off of it, let's take a closer look at Apache Corporation (NYSE:APA), Cabot Oil & Gas Corporation (NYSE:COG), and Chesapeake Energy Corporation (NYSE:CHK).

During the last 10 years, APA has posted positive returns in the week after Easter eight times. On average, the stock has gained 4.2% for the week, including a 10.4% gain last year. Should history repeat itself, the shares could break out of their current consolidation pattern in the $48-$51 area. At last check, APA was down 4.5% at $48.00, following a downgrade to "equal weight" at Capital One Securities.


Option traders have been betting against Apache Corporation in recent weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The stock's 10-day put/call volume ratio of 1.30 ranks in the bearish 77th percentile of its annual range. Meanwhile, short sellers have been piling on APA, with short interest spiking 35.6% during the latest reporting period. Suffice it to say, these skeptics could find themselves on the ropes next week, if the shares continue their usual post-Easter ways.

Moving along, COG has been positive nine times out of 10 in the week after Easter, sporting a typical gain of 3.8%. Year-to-date, the shares have surged 21.6%. Today, however, the stock has slipped 1.2% to $21.51, as falling oil prices overshadow a price-target hike to $24 at Deutsche Bank.


Option traders have been piling on Cabot Oil & Gas Corporation's bearish bandwagon, buying to open nearly 16 puts for every call during the past two weeks at the ISE, CBOE, and PHLX. More significantly, the resultant put/call volume ratio of 15.81 outstrips all but 7% of comparable readings recorded in the prior 12 months.

Rounding out our trifecta of post-Easter winners is CHK. The energy stock has been positive 80% of the time in the past decade during the week in question, and on average has advanced 1.3%. That would be a welcome sight for shareholders, who have watched the stock plummet 12.9% today at $4.20. Looking more closely at the charts, CHK has struggled to clear the $5 level on a daily closing basis, finishing above it just three times in 2016.


Unlike the previous two stocks, Chesapeake Energy Corporation has been showered with optimism by option traders. The stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 1.44 ranks in the 71st annual percentile. Likewise, CHK's Schaeffer's put/call open interest ratio (SOIR) of 1.42 -- while put-skewed on an absolute basis -- sits below 87% of all other readings from the prior year.


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