Wednesday, 6 May 2015

CHK - falling on lousy earnings

With the main market in a somewhat bad mood for a second day, there was notable weakness in Chesapeake Energy (CHK), settling -7.1% @ $14.73. Near term outlook is bearish, with mid term viable downside to a new multi-year low of $10.

CHK, daily

CHK, weekly


Q1 earnings came in better than the market expected, but then the headline EPS of 11 cents (4 cents expected), is to be carefully treated.

There was an actual nasty 'real' loss of -$3.5bn or so, although CHK claims that is a 'one off'.

In any case, with Nat' gas prices as they are, CHK is battling just to hold annual EPS of around 50 cents.

If the main market can see a sig' retrace lower this summer (of at least 10%), then CHK looks set for further downside to at least the psy' level of $10.

*to be clear, I have long term confidence in CHK, but not at this price... but more so... not at this time.