Will this continue? Just look at the days' reports, sounds like a big day for traders and hopefully long investors. We'll see. But here's a report from late last Friday that began the day before that was very shocking and surprised everybody.
UPDATE: Epic short squeeze helps launch historic gains in oil stocks
UPDATE: Epic short squeeze helps launch historic gains in oil stocks
By Tomi Kilgore, MarketWatch
Chesapeake's stock posted its biggest-ever weekly gain, as short interest topped 40% of public float
Shares of Chesapeake Energy, EP Energy and Rexx Energy rocketed to their biggest ever weekly gains Friday, as an extended run-up in crude oil prices helped trigger a massive retreat by those who bet heavily against some downtrodden energy stocks.
Chesapeake's stock (CHK) has soared 19% on Friday on volume of 188.6 million shares, making it the most active U.S. stock on the day, and climbed 89% for the week. The stock's second-biggest weekly percentage gain since it went public 23 years ago was 47%, during the week ending Dec. 12, 2008, according to FactSet.
Short interest, or bets that the stock would fall in price, in the oil and gas exploration and production company rose to 234.7 million shares during the first half of February. That was more than 40% of the public float--the number of shares available to trade by the public--and more than triple the short interest of a year ago.
Meanwhile, continuous crude oil futures soared to its biggest weekly gain in over six months through late-trade on Friday, and stretched its weekly win streak to three weeks, the longest since May 2015. The futures have run up 23% during the win streak, the biggest three-week stretch of gains since March 1999, amid an improving demand and supply environment (http://www.marketwatch.com/story/hope-that-us-production-is-shrinking-drives-gains-for-oil-2016-03-04).
Chesapeake Energy was in the news this week, but not about anything that might move the stock. Former Chief Executive Aubrey McClendon died in a car crash Wednesday (http://www.marketwatch.com/story/aubrey-mcclendon-former-chesapeake-ceo-dead-after-car-accident-2016-03-02), a day after being indicted on antitrust charges.
(https://w.graphiq.com/w/3jzY5aFZ9GJ)
Shares of EP Energy (EPE) and Rexx Energy (REXX) have more than doubled this week. EP's stock shot up 33% on Friday, on top of Thursday's 28% rally, while Rexx's stock followed up two-straight gains of nearly 40% with a 24% jump on Friday. The previous biggest weekly share gains were 36% for EP in December 2014 and 82% for Rexx's stock in March 2009.
Despite the historic rallies, Chesapeake's stock had still lost 67% over the past year, while EP shares had tumbled 62% and Rexx's stock had plunged 71%.
Kudos to analysts at SunTrust Robinson Humphrey, who warned last week that an epic short-covering rally could be imminent in the energy sector, with a bounce in oil prices. "Total short interest remains much higher than in years past; that leads us to believe that a number of stock prices could jump quickly if/when short covering begins," the analysts wrote in a note to clients.
They highlighted Chesapeake, EP and Rexx has having short interest of more than 40% of their floats.
Don't miss: Why you should never short-sell stocks (http://www.marketwatch.com/story/why-you-should-never-short-sell-stocks-2015-11-19)
Among other stocks they highlighted for potential short squeezes, Approach Resources Inc.'s (AREX) more than doubled this week, by far its biggest-ever weekly gain. Carrizo Oil & Gas Inc. shares (CRZO) soared 23% this week, the biggest weekly gain since May 2009.
Elsewhere, Apache Corp. shares' (APA) weekly gain of 22% was the biggest since October 1982, and the 21% weekly jump in ConocoPhillips' (COP) stock is the biggest since August 1989.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
March 04, 2016 16:46 ET (21:46 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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