Why this Energy Stock Could Start 2020 Bullishly

CNX shares are testing the 200-day once again

by Josh Selway

Published on Dec 24, 2019 at 10:22 AM

In his latest Indicator of the Week, Schaeffer's Senior Quantitative Analyst Rocky White took a look at stocks that may have short-covering upside when the calendar turns to 2020. One name to watch out for is Pennsylvania-based CNX Resources Corp (NYSE:CNX), which is hoping to turn things around on the charts in the coming year.

CNX stock is set to close 2019 with a year-to-date deficit around 22%, last seen at $8.85, which likely means the short sellers holding on to 17.3% of the float have done well for themselves. Should these bears decide to cover after Jan. 1, there could be a rally in CNX shares, however, since the 31.8 million shares sold short represent almost 8 days' worth of buying power, based on average daily trading volumes. Typically we view any reading above 5 as noteworthy.

On a technical basis, CNX Resources also just broke through the 200-day moving average once again, after a similar test in November resulted in a quick pullback. Still, this quick recovery back atop the closely watched 200-day at least suggests some technical strength is still behind the energy concern. What's more, we should also point out that near-term options traders are put-heavy on CNX, based on the Schaeffer's put/call open interest ratio (SOIR) of 11.18, which ranks in the 98th annual percentile, so a shift in sentiment among these speculators could also buffer CNX's position on the charts.

cnx stock dec 24


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