Energy Stock Ripe for Bearish Options Trade

EOG is trading below several layers of potential resistance

Dec 18, 2018 at 10:25 AM
    facebook X logo linkedin


    Energy stock EOG Resources Inc (NYSE:EOG) has struggled since its mid-October highs near $133.50, down more than 25%. A negative earnings reaction in early November only exacerbated headwinds for the shares, with the Nov. 1 pre-earnings close creating a stiff ceiling in recent weeks. What's more, a recent rejection at the 40-day moving average sent EOG tumbling below the round century mark, and an unwinding of optimism could lead to bigger losses for the shares.

    eog daily chart dec 14

     

    In fact, 29 of 38 analysts maintain a "buy" or better rating on the petroleum refiner, even with its nearly 11% year-to-date deficit. This puts the shares at risk of downgrades, which could spark more selling.

    Elsewhere, short sellers have been ramping up their exposure, with short interest surging 42.3% in the two most recent reporting periods. There's still room on the bearish bandwagon, though, considering these bearish bets account for just 2% of EOG's available float.

    Plus, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.00 ranks in the 71st annual percentile, meaning short-term traders are more put-heavy than usual. Put open interest is stacked down to the 85 strike in the January 2019 series, which could serve as a magnet for the shares in the near term.

    Subscribers to Schaeffer's Weekend Trader options recommendation service received this EOG commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

     

    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