Devon Energy Corp Stock Hits Two-Year High but Shows Bearish Signal

Devon Energy Corp (DVN) stock has risen 37% in 2023 and hit a two-year high, but it is flashing a historically bearish signal on the charts. The 50-day, buy-to-open call/put ratio has crossed over 1.0, which has occurred six times in the last three years, resulting in an average 10-day loss of 5.2% and a 6.2% loss 21 days later. DVN's 14-Day Relative Strength Index is also deep in "overbought" territory at 74. Options traders are pricing in low volatility expectations, but a sudden profit-taking selloff could occur if oil prices cool or the U.S.-Iran war is resolved sooner than expected.