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Diamondback Energy Inc (FANG) Trading Volume Soars as Stock Breaks Out

Diamondback Energy Inc (FANG) issued preliminary results today, and touched an all-time high

Oct 10, 2016 at 2:41 PM
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Diamondback Energy Inc (NASDAQ:FANG) is trading sharply higher after delivering preliminary third quarter results, increasing its 2016 guidance, and issuing preliminary 2017 guidance. At last check, FANG has popped 10.6% to $104.70, after touching a new all-time high of $105.40 earlier today. So far in 2016, FANG is up by 56%, and both stock and option volume are heating up amid today's big move.

Specifically, FANG options are crossing the tape at twice their usual intraday clip, with puts slightly outnumbering calls. While absolute option volume remains relatively low on the stock, the current intraday volume of 1,759 easily outstrips the stock's average daily volume of 955 contracts, per Trade-Alert. Meanwhile, FANG's share volume of 2.47 million is pacing in the 99th percentile of its annual range.

Analysts were keen on FANG ahead of today's pop, with 17 of 22 rating the shares a "buy" or better, without a single "sell" on the books. However, short interest has been on the upswing, up 10.2% over the last two reporting periods. Shorted shares now account for 7% of FANG's float, which would take over a week for traders to cover, at FANG's average daily volume. Given Diamondback Energy Inc's big big breakout to record highs today, it's possible that some of these short sellers may be exiting their positions, creating a short squeeze effect -- and continued short covering activity could be a positive catalyst in the days ahead.

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