This Oil and Gas Stock Has Room to Run

Northern Oil & Gas, Inc. (NYSE:NOG) staged a sharp bounce off long-time support at the 160-day moving average in mid-April, toppling its former three-year highs to notch a series of fresh peaks last week. While NOG is cooling slightly today, last seen off 0.2% at $33.15, the stock is still looking to log its best month since December 2020, up 32% for May. Plus, we have reason to believe May's rally could resume and extend well into the coming month. 

This is because Northern Oil & Gas stock just popped up on Schaeffer's Senior Quantitative Analyst Rocky White's list of stock's trading within 2% of their 52-week peak while sporting historically low implied volatility. According to this data, there have been three other times in the past five years when the security was trading near these highs, while its Schaeffer's Volatility Index (SVI) stood in the 20th percentile of its annual range or lower. This is the case with NOG, which sports an SVI of 58% that stands lower than all but 15% of readings from the past year. 

One month after these signals, NOG was higher 67% of the time, and averaged a 12.09% return during this time period. From where it currently sits, a similar move would place the stock just above the $37 level for the first time since October 2018. 

An unwinding of short interest could put additional wind at NOG's back. The 7.69 million shares sold short make up 11.8% of the stock's available float, and would take over six days to cover, at the equity's average pace of trading.