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Where Encana Stock Could Settle This Week

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Encana’s implied volatility

As of October 6, 2017, Encana (ECA) had an implied volatility of ~40.7%. It’s lower than its implied volatility of ~52.5% at the end of 2Q17. In the last week, Encana’s implied volatility rose from ~39.6% to ~40.7% due to the ~5% fall in its stock price.

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Encana’s price range forecast

Based on Encana’s implied volatility of ~40.7%, assuming the normal distribution of prices, 365 days in a year, and standard deviation of one, its stock could close between $11.86 and $10.60 in the next seven calendar days. Encana stock will stay in this range 68% of the time. On October 6, Encana’s stock price closed at $11.23.

Peers’ price range forecast

As of October 6, 2017, California Resources (CRC) has an implied volatility of ~75.2%. California Resources stock is expected to close between $11.34 and $9.20 in the next seven calendar days. On October 6, California Resources’ stock price closed at $10.48.

Encana’s other peer, Southwestern Energy (SWN) has an implied volatility of ~53.3%. Southwestern Energy stock is expected to close between $6.37 and $5.49 in the next seven calendar days. On October 6, Southwestern Energy’s stock price closed at $5.93.

Based on the inputs used to calculate the price range, there’s a 68% probability that these stocks will close in their range for the given period.

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