Money Markets

What the Chart Means for Antero Resources Corporation (AR)

Antero Resources Corporation (NYSE:AR) stock flux has recently been causing stir among the investment community. Many experts agree that the truth about a stock is best reflected in the way it moves on the chart. For this stock, the chart has a lot to say about future performance.

How has the stock performed recently?

Antero Resources Corporation (NYSE:AR) in the last month has decreased -1.68%. Shares are now up over the past year, outperforming the broad market by -100% and outperformed a peer group of similar companies by 103%. After the latest session, which saw the stock close at a price of $19.26, AR sits below its 52-week high. Antero Resources Corporation (NYSE:AR) has been trading in a bearish manner, based on the relative positions of the stock’s 20 and 200 day moving averages.

Momentum indicators

Of course, these surface-level price movements don’t tell us much about the direction that AR may be headed in the future. If we want to get a sense of AR’s future performance, we have to look at the speed and size of these price movements. Using what are known as momentum indicators, we can use the stock’s price momentum to get a sense of whether the stock is in the midst of, or nearing the end of, a current trend. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for AR is 47.55%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 47.00%, tells a similar story, and suggests that AR currently trades in neutral territory.

What do the trading volumes reveal?

In addition to price, analysts use volume trends to predict future performance. The level of trading activity in a stock is often a good proxy for the level of interest and enthusiasm for the name within the investment community. A sudden increase in activity can be a sign that investors are trading in anticipation of a catalyst. Antero Resources Corporation (AR) average trading volume of 3,499,130 during the past month is 4.24% above its average volume over the past year, indicating that investors have been more active than usual in the stock in recent times.

What do the analysts think?

AR is currently undervalued by -27.68% relative to the average 1-year price target of $26.63 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.20, which implies that analysts are generally neutral in their outlook for AR over the next year.

How risky is the stock? 

Absolute price performance isn’t the only thing analysts consider when predicting future performance: volatility matters as well. Beta, which measures the stock’s volatility relative to the overall market, is a simple but effective metric for assessing risk.

Antero Resources Corporation (NYSE:AR) has a beta of 0.97, compared to a beta of 1 for the market, which implies that the stock’s price movements are less extreme than the market as a whole. AR therefore has a below average level of market risk. During the past couple of weeks, AR average daily volatility was 41.17%, which is -12.01 percentage points higher than the average volatility over the past 100 days.

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