Crude oil prices are flirting with YTD highs, but these stocks could dip
Oil prices are on the rise again today, with front-month crude last seen 1.8% higher at $57.08 per barrel -- a new year-to-date high. However, a pair of energy stocks recently flashed historically bearish signals, suggesting it may be time to jump ship on Gulfport Energy Corporation (NASDAQ:GPOR) and EQT Corporation (NYSE:EQT) -- one of which reports earnings soon.
GPOR Stock Flashes Bearish Signal Before Earnings
Gulfport Energy shares are up 3% to flirt with $8.25. The security has advanced more than 25% year-to-date, but is now within one standard deviation of its 70-day moving average, after a lengthy stretch below this trendline. According to Schaeffer's Senior Quantitative Analyst Rocky White, there have been eight similar run-ups in the past two years, after which GPOR averaged a one-month loss of nearly 12%, and was lower all but once.
It's worth noting that Gulfport is slated to report earnings after the close next Wednesday, Feb. 27. Nevertheless, the stock's Schaeffer's Volatility Index (SVI) of 52% is higher than just 27% of all other readings from the past year. In simple terms, this indicates that GPOR's short-term options are pricing in relatively modest volatility expectations for the shares.
Despite the equity's channel of lower highs and lows over the past few months, nearly half of the analysts following GPOR maintain "buy" or better ratings. Should the shares once again backpedal in the face of familiar resistance, a round of negative analyst notes could place added pressure on the energy stock.
EQT Shares Stare Up at Familiar Resistance
EQT Corporation stock was last seen 3.9% higher at $19.70. The equity has been in a channel of higher lows since bottoming at $16.29 in mid-November, with upside momentum capped by the $20-$21 neighborhood -- where the security landed after an October bear gap. Plus, EQT is back within one standard deviation of its 80-day trendline, after a lengthy stretch south of the moving average. After 10 prior signals, the shares were down a month later nearly every time, averaging a loss of just over 5%.
Again, despite an overhead wall on the charts, EQT still sports six "buy" or better endorsements from analysts, compared to six lukewarm "holds" and just one "sell." Plus, the average 12-month price target of $25.58 represents a nearly 30% premium to the stock's current price. Should EQT once again retreat, a round of downgrades or price-target cuts could exacerbate selling pressure.
Traders looking to speculate on the stock's short-term trajectory should consider options. The stock's Schaeffer's Volatility Scorecard (SVS) sits at a lofty 90 out of a possible 100, suggesting EQT has handily exceeded option traders' volatility expectations in the past year.