The fundamentals are obviously strong after the last year and a half
The revenue and profits skyrocketed as the price of oil went up. All the measures possible are flashing green, whether its EPS growth, ROE, ROA, debt-to-equity etc.
Valuation is still low, just like the wider energy market, due to ESG reasons and just a general unwillingness to participate in the oil industry
The recession fears are bringing estimates of most measures significantly lower but these aspects have already been accounted for in the price
I also believe that after the outperformance of the growth part of the market, flows will start circling back from growth into parts of value (energy)
Technicals
This trade is however more about the technicals than fundamentals
The thing that attracted me the most to this chart is the outperformance of RRC (bottom of the daily chart) relative to the energy sector, which has been struggling as of late. Despite the weakness in energy and oil, RRC has been accumulating and building a base
The base was finished after stellar earnings, and is currently on the brink of a breakout
That would also complete a massive bull flag on a weekly chart
All your typical indicators are also flashing a buy, while analysts are increasing their price targets
Trade
As I already mentioned, we are currently on the brink of breaking higher through a crucial resistance level
The stock is currently consolidating and I am waiting for a signal that the price is about to burst higher, where I would happily buy
Caveats include mainly a breakdown in the price of oil and fake breakout higher; definitely watch out for these
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