One Way to Play This Oil & Gas Stock

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Shorts have been in covering mode on CLR

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Shares of oil and gas name Continental Resources Inc. (NYSE:CLR) has added over 40% in 2022, but recently pulled back to the 80-day moving average as fears over slowing growth mounted. This could be an attractive buying opportunity within the context of uptrends. Further, if CLR shares move below their April/May lows near the $55 area, all bets are off, as technical backdrop would come into question.

Wall Street is pessimistic toward Continental Resources stock, with 11 of the 16 covering brokerages sporting tepid “hold” or worse ratings. In simpler terms, this leaves ample room for upgrades on CLR in the coming weeks. Shorts have been in covering mode on the security, accounting for 35% of the stock’s total available float. At Continental Resources stock’s average pace of trading, it would take shorts nearly four days to buy back these bearish bets. 

Todd is the Senior Vice President of Research at Schaeffer’s Investment Research and has been with the research firm since 1993. Mr. Salamone is a graduate of The Ohio State University with a double major in finance and insurance and risk management. He has over 25 years of options trading experience, emphasizing technical and sentiment analysis in his equity, broad market and sector research. Mr. Salamone is the author of Schaeffer’s Monday Morning Outlook, and he has been interviewed on CNBC, Bloomberg Television, Fox Business Network and quoted in several national media outlets such as The Wall Street Journal, Reuters, the Associated Press and others. Todd has trained tens of thousands of traders to be successful options traders.