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Energy Transfer Rose ~10% on December 26: What Indicators Suggest

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Nov. 20 2020, Updated 2:36 p.m. ET

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Energy Transfer (ET) stock was one of the top gainers among energy midstream giants on December 26. It surged 9.7%, which was its highest one-day gain in almost two years. Energy stocks broke the downward run after crude oil prices rose more than 7% yesterday. The S&P 500 also rose almost 5%.

Energy Transfer stock continues to look weak given a large discount to its simple moving average levels. It’s currently trading at $12.9, almost 12% and 21% below its 50-day and 200-day moving average levels, respectively. The level close to $14.7 will likely act as a resistance for the stock in the short term.

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Relative strength index

Energy Transfer stock is currently trading at an RSI (relative strength index) of 44, indicating that it is neither overbought nor oversold. It had entered the oversold zone on December 18.

Midstream giants Kinder Morgan (KMI) rose more than 6%, while Enterprise Products Partners (EPD) surged 5% on December 26. The weakness in crude oil prices has badly dented the energy MLP space recently. Both KMI and EPD are trading well below their early 2018 levels.

Short interest

The short interest in ET stock increased a notable 18% on December 14. On November 30, the total shorted shares in Energy Transfer were 68.6 million. The total shorted shares increased to 81.3 million on December 14. An increase in the short interest could indicate that more investors expect the stock to fall from its current price level.

On December 26, the implied volatility in Energy Transfer was 50%, significantly higher than its 15-day average volatility. In comparison, the S&P 500 experienced volatility of close to 26%. The implied volatility represents investors’ unease. Rising volatility is usually related to falling stock prices.

Read how Energy Transfer stock is currently valued in Energy Transfer’s Charts, Valuation, and Target Prices.

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