Will Chesapeake Energy’s (CHK) Stock Rise With Energy Prices?
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Chesapeake Energy Corp. engages in the acquisition, exploration and development of properties for the production of oil, natural gas and natural gas liquids from underground reservoirs. It focuses its acquisition, exploration, development and production efforts in the following geographic operating areas: Marcellus, Haynesville, Eagle Ford, Brazos Valley, and Powder River Basin.
Take a look at the 1-year chart of Chesapeake (CHK) below with the added notations:
Multiple times over the past several months, CHK has stalled at its $105 resistance (red) level. That level is also the stock’s 52-week high barrier. A break above that $105 mark most likely means another leg higher for CHK.
The Tale of the Tape: CHK has a 52-week resistance at $105. The possible long position on the stock would be on a breakout above that level with a stop placed under it.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key…
Good luck!
Christian Tharp, CMT
