Oil concern Diamondback Energy (FANG) has rallied in the sector, adding more than 25% in the past month and over 117% in the past nine months. Equities hit a record high of 2.
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24 today, and more fresh peaks could be on the way, according to a study by Schaefer’s senior quantitative analyst Rocky White.
According to White’s study, these highs fall between historically low implied volatility (IV). The security sports a Schaefer’s Volatility Index (SVI) of 46%, which sits in the 5th percentile of its 12-month range. There have been five other peaks over the past five years where Diamondback was trading within 2% of its 52-week high, while its SVI was at 20.th Annual percentile or less.
One month after 80% of these signals, the FANG was higher, with an average return of 5.9% over that time period. A similar move would mean for the security to rise even higher, which puts it a little shy of the $172 mark.
Despite this recent surge, short interest is also on the rise, up 10.3% over the previous reporting period. At FANG’s average daily trading speed, it will take about three days for these bearish bets to buy back.
On the other hand, analysts are eyeing an even higher upward trend for FANG. The stock’s 12-month consensus price target is $180.07, a 12.4% premium from current levels. Also, all equity except one in 14 firms covered in coverage is called a “strong buy.”
Credit: www.forbes.com /