Devon Energy Stock Looks Due for a Rebound

DVN's pullback from last month's peak could present a buying opportunity

Deputy Editor
May 23, 2024 at 2:59 PM
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The shares of Devon Energy Corp (NYSE:DVN) are down 1.2% at $48.24 at last check today. The stock has been slipping on the charts since its Apr. 12, roughly 52-week high of $55.09, which occurred after 10-straight weekly gains. However, DVN is still up 6.5% in 2024, and this recent pullback has it testing support at its 80-day moving average, a historically bullish trendline. 

Per Schaeffer's Senior Quantitative Analyst Rocky White, the security has come within one standard deviation of its 80-day moving average five times over the past three years, defined for this study as having traded north of this trendline 80% of the time in the past two months, and in eight of the past 10 trading days.

One month later, the stock was higher 80% of the time after these signals, averaging an impressive 10.9% return. A move of similar magnitude would place the stock above $53, near its recent peak.  

When betting on DVN's next move, options could be a good way to go. The stock's Schaeffer's Volatility Index (SVI) of 22% ranks in the low 8th percentile of its annual range, meaning options traders are pricing in low volatility expectations at the moment. 

DN May23

 

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