An Unwind in Pessimism Could Send Energy Stock Surging

Energy provider Nextpower Inc (NASDAQ:NXT) saw its Friday’s lows test its 50-day moving average, only for the stock to pivot higher from there. The shares cleared $90.48 -- the site of its close prior to a post-earnings bull gap on Oct. 24 -- and $93, which is 1.5 times NXT’s channel at $62 from February 2024 to June 2025.
 
Shorts are in covering mode, and with a modest 3.5% of the stock’s total available float sold short, this could keep the wind at NXT’s back.
 

 
An unwinding of pessimism in the options pits could propel the security even higher. This is per NXT’s Schaeffer's put/call open interest ratio (SOIR) of 2.17, which ranks in the 94th percentile of readings from the past 12 months. Digging deeper, there’s a heavy buildup of put open interest at the 90 strike that could act as options-related support.
 
Our recommended call option has a leverage ratio of 4.5 and will double on a 23.5% rise in the underlying equity.