Friday, 12 June 2015

BTU, CHK, RIG - energy stocks under pressure

Whilst the broader market settled the week moderately lower, there was particular weakness in the energy sector. Peabody Energy (BTU), Chesapeake Energy (CHK), and Transocean (RIG), settled lower by -8.6%, -2.0%, and -2.0% respectively. Outlook is bearish into the late summer/early autumn.

BTU, daily

CHK, daily

RIG, daily


To be clear...

I am bearish the miners (whether coal, copper, gold/silver), and most energy stocks into the late summer/early autumn.

BTU is especially looking dire... and I am almost tempted to add it to the 'set to disappear' list of other coal miners of ACI, ANR, and WLT.

As for CHK and RIG, both are under pressure as energy prices remain broadly weak from summer 2014, not least via the strong USD, which is set to level out in the DXY 92/90 zone.. before a hyper ramp to the 120s into 2016.

*I have long term confidence in the viability of CHK and RIG, but for now.. both look highly vulnerable to lower levels across the summer.