Why Trade Chesapeake Energy Corporation (NYSE:CHK) ?

In early September Oil prices were largely where they are right now but from then to now shares of Chesapeake Energy Corporation (NYSE:CHK) have fallen by 30%.  Initially, oil prices declined, but then increased aggressively only to settle at least for now at prices roughly equivalent to where they were in the early part of September.

Still, Chesapeake Energy is down significantly, which begs a question for traders.

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Arguably, the question we're putting on the table does not pertain as much to investors as it does to traders, but in the oil space, especially in a company like CHK, most persons interested in buying the stock are considering it for a trading opportunity anyway so we expect that this question is suited for almost everyone interested in the stock.

When trading opportunities are so actionable in oil prices why would a trader attempt to engage in Chesapeake Energy, whose price has steadily declined even while oil prices increased?

Trading oil is much more efficient when we use oil directly as the trading instrument, which is what you get when you trade ProShares Ultra DJ-UBS Crude Oil (NYSEARCA:UCO) and Proshares Trust II (NYSEARCA:SCO).  In addition, we can easily incorporate the short side of the trade without needing to borrow shares when we buy SCO, a practice that makes the business of trading oil even more efficient.

Our recommendation to any trader who is attempting to trade Chesapeake Energy in relation to oil is to avoid the temptation and to focus on oil related ETFs exclusively.

In our opinion, new buy recommendations are likely to surface in Oil very soon given what happened at the recent unofficial OPEC meeting.  We will alert all of our clients to the trading recommendation when it happens, but we also have already outlined this recommendation in our special report for oil issued on Friday before the recent unofficial OPEC meeting.   SPECIAL REPORT FOR OIL

Technical Summary

Term →Near Mid Long
Bias Weak Weak Strong
P1 5.66 5.47 4.72
P2 5.95 6.82 6.65
P3 6.35 8.26 8.75

Long Term Trading Plans for CHK

October 31, 2016, 12:20 pm ET

The technical Summary and associated Trading Plans for CHK listed below will help you make important timing decisions for your trades. This data is based on our proprietary analysis for CHK. In addition we offer Market Timing Models and Stock Filters in the links above which may increase the proficiency of the decisions you make.

CHK - (Long) Support Plan

Buy over 4.72 target 6.65 stop loss @ 4.46.
The technical summary data tells us to buy CHK near 4.72 with an upside target of 6.65. This data also tells us to set a stop loss @ 4.46 to protect against excessive loss in case the stock begins to move against the trade. 4.72 is the first level of support below 5.62 , and by rule, any test of support is a buy signal. In this case, support 4.72 would be being tested, so a buy signal would exist.

CHK - (Short) Resistance Plan

Short under 6.65 target 4.72 stop loss @ 6.91.
The technical summary data is suggesting a short of CHK as it gets near 6.65 with a downside target of 4.72. We should have a stop loss in place at 6.91 though. 6.65 is the first level of resistance above 5.62, and by rule, any test of resistance is a short signal. In this case, if resistance 6.65 is being tested, so a short signal would exist.

CHK Long Term Analysis

CHK EPS Analysis

CHK Dividend Chart

CHK Revenue chart

CHK Growth rate - Quarterly

CHK Growth rate - Yearly

CHK PE chart

CHK PEG chart