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.

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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.

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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.

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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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