Baytex – Trading Trend & Behavior Longs and Momentum Traders,
It has been a great time these last two weeks. A continuation of this good fortune, is what I would like to see. It is an unusual pattern we have seen during this time. First, we see a slowdown of bashing on the board, while volatility on a daily, weekly, and even monthly basis winds down. We have news of buybacks, and a BNN appearance by Eric Nuttal that is positive.
Here is a summary of trading action recently.
May 9th Buybacks Begin - This is that last short attack we have seen. Opens near the high, and closes near the low. 375,000 shares are bought, at a reported price of just under $6.20.
May 12th Another short smack down is attempted, only to see 425,000 shares bought back at $5.95. At this point, I think the shorts realized, any attempts to drive the stock down, were going to be a lot more costly, as they were now only helping the buyback cause. The math in what they were attempting, no longer made sense.
May 24th Most of the bashing has stopped – The volume is about 20-30% lower than it had been, volatility is minimal. Share price is trending up.
June 3rd Verification, and quantitative statistics regarding buybacks are published. Volume and price appreciation follow. We are up over the next three trading days from $7.12 - $8.35, on about 142% of normal daily volume.
There is another triple expiration next week, to the tune of US $3.2 trillion. March expiration was quite explosive for oil prices. Will this one repeat that kind of volatile price action? I have no opinion, or prediction regarding next week. I think we are in a better position this time, with buybacks in place, and debt being eliminated at a rapid pace. It is no secret Q2 and Q3 earnings are going to be great.
This post is just another example of how difficult it is now, to post something, that offers new insight.
Baytex itself is quite interesting. Still undervalued, and trending in the right direction. It sure is better today, then when we started the year. We have entered the zone where not much trading has occurred in many years. This zone is CAD $8-15. Lets hope we continue to move upward slowly, so buybacks can be most effective.
RS
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