Tuesday, 19 January 2016

CHK, FCX, RIG - all on the disappear list

The underlying weakness in the energy/mining industry continues. Chesapeake Energy (CHK), Freeport McMoran (FCX), and Transocean (RIG) settled lower by -13.3%, -9.1%, and -5.6% respectively. All three are on the 'dissapear' list, as there is yet to be industry capitulation.

*rather than highlight the daily charts, I wanted to put things into perspective, via the giant monthly charts...

CHK, monthly

FCX, monthly

RIG, monthly


There are literally dozens of smaller energy and mining stocks on the verge of implosion.

Yet... the mid tier names are far more important.

Until we see a few of the bigger companies STOP digging up iron ore, and quit drilling for Oil/Nat' Gas, commodity prices will naturally continue to decline.

My guess is that at least 1 of the above trio will not be around by end 2016. If I had to guess... FCX, since its overly leveraged in both the oil/gas AND mining sector.

*I've no position in any energy/mining stock. Would only consider after capitulation starts to occur this late spring/early summer.

The survivors of the commodity collapse from 2011 are going to be well positioned for the 2020s, as commodities are going to begin a multi-year up wave at some point.