Wednesday, 23 March 2016

CHK, FCX, SDRL - smashed junk

Whilst the main market closed broadly weak, there was severe weakness in the usual 'junk suspects'. Chesapeake Energy (CHK), Freeport McMoran (FCX), and Seadrill (SDRL) settled lower by -14.3%, -11.4%, and -10.1% respectively. Mid term outlook is dire.

CHK, daily

FCX, daily

SDRL, daily


What should be clear to anyone, even when the main market is only moderately lower, the 'junk' stocks get effectively smashed to pieces.

Suffice to add... I have ALL three stocks of CHK, FCX, and SDRL on the 'disappear list'. I'd be surprised if at least one hasn't filed for bankruptcy by June.

In terms of order of vulnerability.. all three companies look in equally serious trouble.

*I've no position in either.. but I believe all merit keeping an eye on, as they are reflective of some serious underlying economic problems.