Don’t Expect Energy Stock’s Pullback to Last

EQT could soon attempt another rally to the $40 level

EQT Corp (NYSE:EQT) stock is down 1.8% at $38.01 this afternoon, brushing off a price-target hike from Truist Securities to $41 from $37, as it struggles with pressure from its 40-day moving average. Shares came just shy of the $40 level in December, but still sport a 13.6% year-to-date gain. The stock’s Nov. 3, 52-week high of 45.23 is far in the rearview. However, EQT could soon erase some of this pullback, thanks to a historically bullish trendline.

 

 

EQT 40 260 Days

EQT was higher one month later in 83% of those instances, with an average 4.9% gain. A move of similar magnitude from its current perch would place the security closer to $40 again.

 

Short interest is unwinding, down 11.3% in the most recent reporting period, but there’s still plenty of pessimism left to unravel, which would boost the shares. The 20.16 million shares sold short account for 5.2% of EQT’s available float, or roughly four days’ worth of pent-up buying power. 

What’s more, premiums are affordably priced. The security’s Schaeffer’s Volatility Index (SVI) of 32% ranks higher than 19% of annual readings. In other words, options players are pricing in low volatility expectations.