Expected price range for HollyFrontier stock
In the previous part, we looked at the trend in HollyFrontier’s (HFC) moving averages. Now, we’ll discuss HollyFrontier’s implied volatility to forecast its stock price range until September 28.
The implied volatility in HollyFrontier has fallen by three percentage points compared to April 2 to the current level of 34%. During the same period, HollyFrontier stock has risen 60%. So, there appears to be a general inverse relationship between the implied volatility and a stocks’ price.
Considering HollyFrontier’s implied volatility of 34% and assuming a normal distribution of prices (bell curve model) and standard deviation of one (with a probability of 68.2%), HollyFrontier’s stock price could close between $91.4 per share and $62.9 per share for the 109-day period ending on September 28.
Peers’ implied volatility
The implied volatilities in Delek US Holdings (DK), Phillips 66 (PSX), and PBF Energy (PBF) have fallen by one percentage point, five percentage points, and three percentage points, respectively, since April 2. Delek US Holdings, Phillips 66, and PBF Energy’s stock prices have risen 45%, 23%, and 46%, respectively, during this period. Currently, the implied volatilities in Delek US Holdings, Phillips 66, and PBF Energy are 39%, 21%, and 34%, respectively.
The SPDR Dow Jones Industrial Average ETF (DIA) and the SPDR S&P 500 ETF (SPY) have also seen a fall in their implied volatilities. They closely resemble the Dow Jones Industrial Average and the S&P 500 Index.
The implied volatilities in DIA and SPY have fallen 11% and 12%, respectively, compared to April 2 to the current level of 11% and 8%, respectively. During the same period, DIA and SPY’s values rose 7% and 8%, respectively.
Next, we’ll discuss HollyFrontier’s dividend yield trend.