Chesapeake Energy stock could bounce off a historically bullish trendline
Chesapeake Energy Corp (NASDAQ:CHK) is adding to its 57.6% year-to-date lead, last seen up 3.3% to trade at $101.34. The security is fresh off a Nov. 2 all-time high of $107.31, while a familiar floor at the $94 contained its latest last pullback. Even better, the
energy stock looks poised to extend these gains and notch a new record, after coming within striking distance of a trendline with historically bullish implications.
Specifically,
Chesapeake Energy stock has recently pulled back to its 160-day moving average, after a few months spent above this trendline.
According to Schaeffer's Senior Quantitative Analyst Rocky White's most recent study, CHK saw two similar signals in the past three years, and was higher one month later each time, averaging a 13.8% jump. A similar move would place the equity at a fresh record high of $115.32.
While short sellers are already hitting the exits, there is plenty of pessimism left to be unwound, which could push the shares even higher. Short interest is down 56.1% in the last two reporting periods, but the 8.65 million share sold short still account for 6.8% of CHK's available float.
Additional tailwinds could come from a sentiment shift the options pits. The equity's 50-day put/call volume ratio of 1.88 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 94% of readings from the last 12 months. This means long puts have been getting picked up at a much faster-than-usual clip lately.