Trade-Ideas LLC identified Continental Resources ( CLR) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Continental Resources as such a stock due to the following factors:

  • CLR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $164.0 million.
  • CLR has traded 4.6 million shares today.
  • CLR traded in a range 200.2% of the normal price range with a price range of $3.79.
  • CLR traded above its daily resistance level (quality: 19 days, meaning that the stock is crossing a resistance level set by the last 19 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on CLR:

Continental Resources, Inc. explores, develops, and produces crude oil and natural gas properties in the north, south, and east regions of the United States. CLR has a PE ratio of 25. Currently there are 10 analysts that rate Continental Resources a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Continental Resources has been 4.6 million shares per day over the past 30 days. Continental has a market cap of $12.8 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.93 and a short float of 22.9% with 4.33 days to cover. Shares are down 13.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Continental Resources as a hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • The gross profit margin for CONTINENTAL RESOURCES INC is currently very high, coming in at 79.23%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 0.05% trails the industry average.
  • Despite the weak revenue results, CLR has outperformed against the industry average of 33.1%. Since the same quarter one year prior, revenues fell by 10.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • CONTINENTAL RESOURCES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CONTINENTAL RESOURCES INC increased its bottom line by earning $2.64 versus $2.07 in the prior year. For the next year, the market is expecting a contraction of 108.0% in earnings (-$0.21 versus $2.64).
  • Net operating cash flow has decreased to $394.62 million or 46.80% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 41.06%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, CLR is still more expensive than most of the other companies in its industry.

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