Bull Signal Could Fuel Oil & Gas Stock Rally

Antero Resources stock’s recent peak comes amid historically low implied volatility

The shares of oil & gas name Antero Resources Corporation (NYSE:AR) have been on a tear higher. Though AR was last seen 0.5% lower at $30.07, yesterday the shares touched a five-month high. Antero Resources stock now boasts a 23.6% year-over-year lead and is up more than 32.5% in 2024. Even better, there’s reason to believe AR could continue to climb in the coming weeks. 

AR Chart April 082024

Specifically, this recent peak comes amid historically low implied volatility (IV), which has been a bullish combination for Antero Resources stock before. According to data from Schaeffer’s Senior Quantitative Analyst Rocky White, there have been five other times in the past five years when the stock was trading within 2% of its 52-week high, while its Schaeffer’s Volatility Index (SVI) stood in the 20th percentile of its annual range or lower. This is now the case with AR’s SVI of 32%, which sits in the low 5th percentile of its 12-month range.

White’s data shows that one month after these signals, the security was higher, averaging an impressive 17.31% return for that time period. From its current perch, a move of similar magnitude would put Antero Resources stock over $35 per share, an area the equity hasn’t seen since December 2022.

An unwinding of pessimism in the options pits could send the shares higher still. the stock’s Schaeffer’s put/call open interest ratio (SOIR) of 1.00 sits in the elevated 99th percentile of its annual range. In other words, short-term options traders have rarely been more put-biased.

The stock could also benefit from a shift in sentiment amongst the brokerage bunch. Of the 16 covering analysts, nine still rate AR a tepid “hold.”

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