Bull Signal Says Devon Energy Stock Still Has Room to Run

DVN already sports a jaw-dropping 363.2% year-over-year lead

Digital Content Manager
Oct 20, 2021 at 12:30 PM
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The shares of Devon Energy Corp (NYSE:DVN) are up 0.2% at $40.36 this afternoon. The equity has been cooling off since hitting its Oct. 18, three-year high of $40.30, though it still has the support of the 20-day moving average, while boasting a jaw-dropping 363.2% year-over-year lead. The even better news is that the security could soon surge even higher, given it is now flashing a historically bullish signal that has preceded major rallies on the charts.

More specifically, Devon Energy stock's latest peak comes amid low implied volatility (IV), which has been a bullish combination for the shares in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there were at least two times in the last five years when the security was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) sat in the 20th percentile of its annual range or lower. This is currently the case with DVN's SVI of 48%, which ranks in the 3rd percentile of its 12-month range.

White's data shows that one month after these signals, the equity was higher, averaging a 14.5% return for that period. From its current perch, a similar move would place DVN above the $46 mark for the first time since early 2017.

DVN 20 Day

The brokerage bunch is already firmly bullish towards Devon Energy stock. Of the 16 analysts in coverage, 14 call it a "strong buy," while only two carry a tepid "hold' rating. Meanwhile, the 12-month consensus target price of $42.03 is a slim 4.2% premium to current levels, indicating the shares could benefit from a round of price-target hikes.

It is also worth noting the security has exceeded options traders' volatility expectations in the past year, per DVN's Schaeffer's Volatility Scorecard (SVS), which sits at 92 out of a possible 100.

 

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