Friday, February 8, 2013

Questar (STR) - Consecutive Muli-year Highs in Stock and Annual High in Vol as Earnings Approach

STR is trading $23.62, up 0.4% with IV30™ up 6.4%. The LIVEVOL® Pro Summary is below.


Click for Free Trial


Questar Corporation (Questar) is a Rockies-based integrated natural gas holding company. Questar operates through its wholly owned subsidiaries: Wexpro Company (Wexpro), Questar Pipeline Company (Questar Pipeline) and Questar Gas Company (Questar Gas).

I found this stock using a real-time custom scan that hunts for elevated vols. What I note here is that STR is at an annual high in vol and while earnings are due out soon (after Feb expiry), the stock has been headed straight up and vol has already breached an annual high. This is an interesting one where we find a stock at annual highs in stock price and volatility with earnings still two weeks away.

Let's start with the Charts Tab (one-year), below. The top portion is the stock price, the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).

On the stock side we can see the impressive price appreciation since Nov -- this was a ~$18.50 stock and is now over $23.50, or nearly a 30% gain. The stock is breaching a new annual high and in fact, it's a multi-year high that continues to be broken almost daily now.

Let's turn to the one-year IV30™ chart, below.

We can see the abrupt pop in vol over the last few days where the implied has risen from ~14% to now over 24%, which is an annual high. With earnings due out on 2-20-13, the implied should continue to rise, meaning we will likely be seeing continual annual highs in the implied for the next two weeks.

Let's turn to the Options Tab, for completeness.

Across the top we can see the monthly vols are priced to 15.165 for Feb and 24.50% for Mar. That vol diff is due to earnings. For a stock with a pretty low implied overall), we could easily see IV30™ cross the 30% level within two weeks.

Follow Live Trades and Order Flow on Twitter: @Livevol_Pro

This is trade analysis, not a recommendation.

Legal Stuff:

No comments:

Post a Comment