Oil Stock Bulls Need to Keep an Eye On

A short squeeze could work in the stock's favor

Jun 15, 2022 at 11:59 AM
facebook X logo linkedin

This commentary first appeared on Forbes Great Speculations, where Schaeffer's Investment Research is a regular contributor.

Oil concern Diamondback Energy (FANG) has been swept up in the sector surge, adding over 25% in the past month, and more than 117% in the past nine months. The equity today hit a record high of $162.24, and according to a study from Schaeffer’s Senior Quantitative Analyst Rocky White, even more fresh peaks could be on the way.

Per White’s study, these highs come amid historically low implied volatility (IV). The security sports a Schaeffer’s Volatility Index (SVI) of 46%, which sits in the 5th percentile of its 12-month range. There have been five other peaks in the past five years where Diamondback was trading within 2% of a 52-week high, while its SVI sat in the 20th annual percentile or lower.

fang june 15

One month after 80% of these signals, FANG was higher, averaging a 5.9% return in that time period. A similar move would mean even more highs for the security, putting it just shy of the $172 mark.

Despite this recent surge, short interest has also been on the rise, up 10.3% in the last reporting period. It would take nearly three days to buy back these bearish bets, at FANG’s average daily pace of trading.

Analysts, on the other hand, are eyeing even more upside for FANG. The stock’s 12-month consensus price target of $180.07 is a 12.4 % premium to current levels. Plus, all but one of the 14 firms in coverage call the equity a “strong buy.”


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI