Thursday, 25 May 2017

CHK, RIG - whacked lower with oil

With WTIC oil significantly lower after the OPEC meeting, the related energy stocks had a rough day. Chesapeake Energy (CHK) and Transocean (RIG) settled lower by -6.3% and -7.6% respectively. Near term outlook is bearish, but the mid term outlook will turn bullish if some aspects of overhead resistance can be broken.

CHK, daily

RIG, daily


Energy stocks have been broadly weak since Dec'2016. Relative to WTIC oil and Nat' gas prices, energy stocks are actually lagging rather badly.

Key levels...

CHK: declining trend, currently at $5.80, and the 200dma in the $6.20s. The cautious will wait to meddle in CHK until some weekly closes >$6.30.

RIG: declining trend, currently around $11.40, and the 200dma in the $11.90s. The cautious will wait for the $12s.

Of the two, I favour CHK, especially as I see better upside in Nat' gas, than in WTIC oil.