Anadarko Is Trading Up, but Can It Continue?

Anadarko (APC) may be on its way up -- at least for a little while -- despite the company's failed bid to acquire Apache (APA) earlier this month and lower-for-longer oil prices. 

On Monday morning, there was a lot of interest in Anadarko calls priced at $65 and coming due in January.

"While the chart has been beaten down and crude struggling to hold 40, we see some signs that Anadarko may be ready to move up -- at least for a trade," said Real Money Pro contributor Bob Lang of Aztec Capital.

The stock closed up 2.74% to $60.35 on Monday. It is a pleasant bump considering year to date the stock is down 27%, which is not surprising in light of oil prices staying below $50 since July.

"Against a normal turnover of 8,000 calls per day in the month of October, our Heat Seeker shows over 28,800 calls trading with 45 minutes to go in today's session," Jon Najarian of optionsmonster.com told Real Money at the end of Monday's trading.

In the chart below, Lang sees support for the stock at the $58 to $60 level and noted that previously when the stock hit that level, it had an increase in turnover, which could signal that institutional investors are buying. In early October, for example, the stock was at the $58 support level and went up to $72 over the next few weeks, representing a 24% gain.

"There are a million reasons to sell but there's only one reason to buy," Lang said, speaking more broadly of institutional buying behavior.

Meanwhile Lang says that the moving average convergence divergence (MACD) still indicates that the stock is a sell, but it could tick higher in the next few days.

On CNBC's "Halftime Report" on Monday, Najarian said he was long both shares and calls of Anadarko in his personal account as well as in accounts managed by Najarian Family Office. 

"The independent oil and gas company withdrew its $20 billion bid for Apache in early November and now it seems investors are focused not on the past but the future for APC," Najarian said. He added that investors may be getting back into the market ahead of next week's OPEC meeting.

"Last year there were certainly fireworks around the meeting and this December 4th some cuts by Saudi Arabia could be a catalyst for the bounce back rally that some have called for," Najarian said.

Looking more broadly at the company against the backdrop of low energy prices, Dan Dicker, of MercBloc and a Real Money columnist, maintains his recommendation of Anadarko at $60 and says that it will be one of the U.S. independent survivors of the prolonged collapse in oil prices.

A prolonged uptick in Anadarko's stock may be a way off but Dicker says that the company's attempt to gain control Apache's Permian Basin shows foresight.

"It shows they are looking ahead and know that certain shale plays here in U.S. will be golden when oil recovers -- probably not for another year, but for sure," Dicker said.

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At the time of publication, Jon Najarian and Najarian Family Office were long shares and calls of APC.