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 $213.6 million.
  • CLR has traded 4.0 million shares today.
  • CLR traded in a range 230.9% of the normal price range with a price range of $3.46.
  • CLR traded above its daily resistance level (quality: 137 days, meaning that the stock is crossing a resistance level set by the last 137 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 for, develops, and produces crude oil and natural gas properties in the north, south, and east regions of the United States. Currently there are 11 analysts that rate Continental Resources a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Continental Resources has been 9.7 million shares per day over the past 30 days. Continental has a market cap of $11.0 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.48 and a short float of 29.6% with 4.21 days to cover. Shares are up 32.5% 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 sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, CONTINENTAL RESOURCES INC swung to a loss, reporting -$0.96 versus $2.64 in the prior year. For the next year, the market is expecting a contraction of 1.3% in earnings (-$0.97 versus -$0.96).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 222.5% when compared to the same quarter one year ago, falling from $114.05 million to -$139.68 million.
  • Currently the debt-to-equity ratio of 1.52 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, CLR has a quick ratio of 0.67, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, CONTINENTAL RESOURCES INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Net operating cash flow has significantly decreased to $441.61 million or 59.02% 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.

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