AR is flashing a historically bullish signal
Natural gas stock Antero Resources Inc (NYSE:AR) has pulled back from its June 20 three-year peak of $44.02, last seen up 1.7% to trade at $32.13 today. Support at the $30 level has helped keep losses in check, with the shares still sporting a 17% year-over-year lead.
Furthermore, the recent pullback has AR coming into contact with a historically bullish trendline. Per Schaeffer's Senior Quantitative Analyst Rocky White, the stock is within 3% of its 40-month moving average after remaining above it 80% of the time in the past 20 months. This signal has occurred two other times in the past 20 years, after which the stock was higher one month later 100% of the time with an average 6.4% gain. A move of similar magnitude from AR's current perch would put it at $34.18.
An unwinding of pessimism in the options pits could provide tailwinds as well. Puts have been much more popular than usual lately, per AR's 10-day put/call volume ratio of 1.62 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than 96% of readings from the past year.
These options are reasonably priced at the moment, too. The equity's Schaeffer's Volatility Index (SVI) of 49% ranks in the low 22nd percentile of its annual range, meaning options traders are pricing in low volatility expectations.