This Natural Gas Stock Could Explode Next Week

OKE shares historically outperform the week of New Year's day

Dec 26, 2017 at 11:46 AM
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Earlier we dug into two Dow stocks that could outperform next week, based on historical returns. While not as well known, another stock to buy New Year's week could be natural gas concern ONEOK, Inc. (NYSE:OKE). That's because OKE shares have finished the week higher 90% of the time over the past 10 years, according to Schaeffer's Senior Quantitative Analyst Rocky White -- the best of any S&P 500 Index (SPX) stock. On average, the equity has jumped 1.9% during the week.

For the most part, ONEOK stock has traded sideways throughout 2017, on pace to close the year down almost 7%. At last check it was trading up 0.4% at $53.43, testing support at the intersecting 200- and 320-day moving averages.

The round $50 level has also acted as support over the past year. What's more, this price point nearly coincides with a 61.8% Fibonacci retracement of OKE's 2014 record high and 2015's multi-year bottom.

Short interest is elevated though, with these bearish bets rising 12.4% in the last two reporting periods. The security has a short-interest ratio of 5.60, meaning it would take short sellers almost six sessions to cover their positions, based on average daily volumes.

As for options activity, volume is generally light. Over the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), fewer than 400 calls and puts have been bought to open. But for anyone looking to speculate on the energy stock, now is a great time to pick up short-term options contracts. That's according to its Schaeffer's Volatility Index (SVI) of 17%, which is an annual low -- pointing to lower-than-usual volatility expectations.


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