Cabot’s implied volatility
On May 24, Cabot Oil & Gas’s (COG) implied volatility was 28.6%, ~4.4% higher than its 15-day average. On the same day, Range Resources (RRC) and Antero Resources (AR) had implied volatilities of 53.9% and 49.37%, respectively.
Between May 26 and 31, Cabot Oil & Gas should close between $24.84 and $36.56 a total of 68.0% of the time. This forecast is based on COG’s implied volatility of 28.6% and assumes a normal distribution of prices. On May 24, Cabot Oil & Gas closed at $25.7.
On May 23, COG’s stock price fell below its 50-day moving average after staying above it for the last seven trading sessions.
Cabot’s 200-day moving average of $24.63 will be the next important support level for its stock. This price level is close to the lower limit of our forecast. On May 24, Cabot stock closed 1.1% and 2% below its 20-day and 50-day moving averages, respectively. A stock’s falling below its short-term moving average indicates short-term weakness. Trade war tensions could be behind the recent fall in COG’s price.
On the same day, COG’s 50-day moving average was 6.5% above its 200-day moving average. In technical terms, the crossover is called a “golden cross.” Usually, a golden cross is followed by an upswing in prices. On May 24, natural gas’s 50-day moving average was 14.7% lower than its 200-day moving average. On the same day, US crude oil’s 50-day moving average was 2.8% higher than its 200-day moving average. In the last quarter, COG operated with a production mix of ~100% in natural gas. However, oil prices are often important for the energy sector’s general sentiment.