Tuesday 6 December 2016

CHK - rising with Nat gas

It was another bullish day for Chesapeake Energy (CHK), which settled +1.3% @ $7.58. With Nat' gas trading in the $3.60s, the short/mid term outlook for CHK is bullish. Next soft target is a test of the Sept' high of $8.14. Broader upside to the $10/11s seems probable by late spring 2017.

CHK, daily

CHK, monthly


*first, a brief overview of Nat' gas, on the giant monthly cycle

Like many equities and commodities, Nat' gas floored early in the year, $1.61 in March, and is currently in the $3.60s. The $4 threshold seems a given at some point this winter/early spring. The only issue is whether there is a brief surge to the $5s... but that will surely require a lengthy cold snap for Europe/North America, which is inherently an impossible thing to see ahead of time.

Suffice to add, its been a very mixed year for CHK.

Having imploded to a Feb' low of $1.50, the company has battled back, and is now comfortably trending higher.

Things only turn provisionally bearish on any monthly close under the key 10MA, currently in the $5.70s. Considering oil/nat' gas prices, price action under that level seems extremely unlikely.