Jan 09 2.50 .10 cent calls would be a lotto play too, but *wow* if it ends up in your favour :)
CHARTS ARE COOOOOL
I like the idea of $4 by the 4th quarter but I need some movement now. I have there Sep $3/CALLS and would love to see about a $1 move in the PPS over the next week. It's been trading sideways long enough now, IMO.
Maybe a good lotto ticket right now for the Jan09 CALLS. I see that the $2.50/CALLS are going for $0.10. Any thoughts on that play?
Giving Cramer the Benefit of Sirius Doubt
seems like a positive article boca_bobby, correct me if I'm wrong
especially in pennyland!
Great article. But I love this line even more:
"I also ignore company news releases because most of them are self-serving attempts to drive the stock price higher."
"The 200-day moving average and the 40-week simple moving average work the same way to identify trends."
40-WEEK SMA VS 200-DAY SMA [PART 2]
Simply put, if you want an accurate 200-day moving average on your weekly charts than plug in a 40-SMA value.
40 weeks is forty, five day weeks, X 5 days a week = 200 day. [40 (weeks) X 5 (days a week) = 200 business days]
ONLY PRICE PAYS
I have noticed the same thing but it happens with all the moving averages. Things move around depending on what time frame you are using (minutes, hours, daily, weekly, monthly, etc.)
I guess we just need to know what we are really looking at. I try to know what my suport and resistances are from the daily chart before I look elsewhere. Maybe we should bring this discussion to ClayTrader. I trust his teachings and maybe he could do a video on it. Just a thought.
40 WEEK SMA vs. 200 DAY SMA
link back to my CHK VS. $NATGAS charts
notice how CHK is now above its 200-day moving average on the daily
now, notice how CHK is also above it's 40-Week moving average.
thus, this proves that a 40 Week SMA is = the 200 Day SMA on a daily chart.
SO... if you are using a 200 day moving average on your Weekly chart, it isn't an accurate 200 day SMA equivalent. This will help your trading immensely if you rely on moving averages, IN MY OPINION :)
ONLY PRICE PAYS
Gold and dollar near decision time
The StreetTracks Gold Trust (NYSE: GLD, Stock Forum) and PowerShares DB US Dollar Index Bullish Fund (AMEX: UUP, Stock Forum) ETFs are fighting for their place in the sun, with the winner likely defining the new long-term trend for several markets.
Think of this intermarket relationship as a dogfight between those who believe that inflation and misery are on the way (GLD) and those who think that the mainstream economic system (UUP) will prevail.
In other words, what we're seeing is the tug of war between those who are seeking a more conventional financial order, as in dollar-backed paper assets, and those who are expecting big trouble ahead and thus are running toward the ultimate safe haven, gold.
So who's likely to be the winner? Much depends on several factors, not the least of which is time, which favors the dollar, since it's been in a bear market for nearly eight years, while gold has been rallying for much of that time.
Next, you have actual economic factors, such as interest rates and rates of growth of gross domestic products, such as the U.S., Europe, and Asia.
Those somewhat favor the dollar, if you believe that the worst may be over for the U.S. economy, in the sense of the sub-prime crisis and related issues.
This, of course, brings Fannie Mae (NYSE: FNM, Stock Forum) and Freddie Mac (NYSE: FRE, Stock Forum)to the forefront, and the U.S. trade and budget deficits, as well as other intangibles, such as who's going to win the presidential election, and so on.
Still, in markets, much has to do with time. And if you look at the charts, which in our view always cast the deciding vote, the dollar is way overdue to mount a significant rally, while gold is way overdue to take a powder.
More CHK Info:
NEW YORK (Dow Jones)--Amid a swarm of natural gas producers rushing to acquire acreage in hard-to-drill rock formations throughout the U.S., Chesapeake Energy Corp. (CHK) has stood apart as one of the most voracious land buyers.
In recent years, some investors and analysts have questioned whether Chesapeake's aggressive strategy exposed the company to too much risk. But if the company's second-quarter results are any indication, the acquisitive tactics are paying off - and the best may be yet to come. Analysts are generally bullish on its stock, which they consider undervalued and due to benefit from even greater gas production.
Oklahoma City-based Chesapeake has surpassed BP Plc (BP) and Anadarko Petroleum Corp. (APC) as the largest producer of U.S. natural gas, according to the companies' second-quarter production data. Chesapeake's average daily U.S. natural gas production in the second quarter was 2,328 million cubic feet, which was 9% more than BP's output and 25% greater than Anadarko's.
Anadarko and BP have lagged behind Chesapeake in acquiring acreage, particularly in the Haynesville Shale, a vast shale rock deposit in Louisiana and Texas that is expected to be a major source of natural gas. Smaller gas producers, including Petrohawk Energy Corp. (HK) and GMX Resources Inc. (GMXR), have also snapped up significant Haynesville holdings, but Chesapeake remains the top leaseholder in the shale deposit.
Chesapeake "is a great example of an aggressive, opportunistic corporate structure," said Jake Dollarhide, the chief executive of Longbow Asset Management, a Tulsa, Okla., investment firm. Longbow has about $40 million in assets under management and holds less than 200,000 shares in Chesapeake.
A 'Gold Mine'
Over the past seven years, Chesapeake's U.S. natural gas production has increased nearly sixfold.
After completing a flurry of acquisitions, including about 8,600 undeveloped acres in Texas' Barnett Shale in January, Chesapeake now owns substantial positions in key natural gas reservoirs, including the Haynesville Shale and the Marcellus Shale in Appalachia. Since early 1998, the company has spent about $18.4 billion to purchase reserves totaling about 7 trillion cubic feet of gas equivalent, or tcfe.
"Our ability to convert leasehold into annual increases of 2 to 2.5 tcfe of reserves is the foundation for our belief that Chesapeake can continue increasing value by at least $10 billion per year," assuming natural gas prices average about $8 a million British thermal units, Chesapeake Chief Executive Aubrey McClendon said in a statement announcing the company's second-quarter results earlier this month. The company didn't return calls for further comment.
Chesapeake has been a particularly active acquirer of land in the Haynesville play. Like other shale reservoirs, Haynesville requires more costly and technologically advanced drilling techniques to extract gas embedded deep in rock formations, but high natural gas prices have made such endeavors profitable.
According to the most optimistic estimates, Haynesville could produce up to 245 trillion cubic feet equivalent of natural gas, enough to supply the entire U.S. for a decade.
"Chesapeake is paying a lot per acre because they see the potential there," Dollarhide said. "It's an untapped gold mine."
In addition to buying up acreage at a rapid clip, Chesapeake has also been successful in attracting the personnel and equipment needed to drill the properties successfully, even as soaring demand for skilled oil and gas workers leads to labor shortages.
"It's incredible how high a level of activity they've been able to sustain," said Jason Gammel, an analyst with Macquarie Securities in New York.
Although Chesapeake's drilling efforts have been fruitful so far, the company's strategy isn't without risks. Chief among those risks is the volatility of natural gas prices, which have swung sharply between $8 and over $13 a million British thermal units in recent months. Natural gas for September delivery on the New York Mercantile Exchange settled floor trade at $8.406 a million British thermal units on Monday.
A sharp uptick in natural gas production from shale plays, or from liquefied natural gas imports to the U.S. from overseas, could send natural gas prices plummeting and cut into Chesapeake's profits.
"The natural gas backdrop right now is less than stable," said Dan McSpirit, an analyst with BMO Capital Markets in Denver, Colo.
And Chesapeake's drilling activity could become more costly as shale gas production ramps up and energy companies clamor for the same equipment and job candidates. Higher costs could lead the company to add more debt to its already highly-leveraged balance sheet.
As of June 30, Chesapeake had about $13 billion of long-term debt and $3.2 billion of assets on its books.
"It could be a challenge to maintain oilfield service and supply commitments and do it at reasonable pricing levels," Gammel said.
As for the company's shares, they have a forward-year price-earnings ratio of 11.7, compared with 9.5 for the industry. But analysts are basing their optimistic outlooks on Chesapeake's future earnings, when Haynesville has started producing. Analysts think the company is undervalued because the market has not fully taken into account the value of Chesapeake's shale acreage and the gas within.
In a recent note, Scott Hanold, an analyst with RBC Capital Markets in Austin, wrote that early results from test wells at Haynesville support a "bullish" view of Chesapeake's stock.
"We maintain our outperform rating because valuation looks attractive and we expect positive Haynesville results over the coming quarters," Hanold wrote.
Like all independent gas producers, Chesapeake's stock is heavily tied to changes in natural gas prices; recent share price swings have directly corresponded to volatility in natural gas prices. Chesapeake shares were recently trading around $46; they traded as high as $74 on July 2.
Although Chesapeake's heavy debt load creates some risk for investors, the company is expected to generate significant cash flow as production ramps up, analysts said.
At current price levels, Chesapeake's shares represent a compelling opportunity for investors, Gammel said.
"The stock is just exceedingly undervalued right now," he said.
(Christine Buurma covers U.S. power companies and the natural gas market for Dow Jones Newswires. She can be reached at 201-938-2061 or by email at email@example.com.)
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> Dow Jones Newswires
Time to Short the Utilities
Cramer Continues to Dig a Sirius Hole for Himself
ONLY PRICE PAYS
many thanks for all the CHK due diligence boca_bobby. great video as well. I'm certainly going to tread carefully in this direction. I'll see what tomorrow brings. there's a lot of money to be made here.
Chesapeake Energy Corporation, an oil and natural gas exploration and production company, engages in the acquisition, exploration, and development of properties for the production of crude oil and natural gas from underground reservoirs. It also markets natural gas and oil for other working interest owners in properties it operate. The company's properties are located in Oklahoma, Texas, Alabama, Arkansas, Louisiana, Kansas, Montana, Colorado, North Dakota, Nebraska, New Mexico, West Virginia, Kentucky, Ohio, New York, Maryland, Michigan, Mississippi, Pennsylvania, Tennessee, Utah, Virginia, and Wyoming. As of December 31, 2007, it had 10.879 trillion cubic feet equivalent of proved reserves; and also owned interests in approximately 38,500 producing oil and natural gas wells. The company was founded in 1989 and is headquartered in Oklahoma City, Oklahoma.
I also seem to remember hearing about CHK buying up land in the area of the new discoveries found in the Gulf states where a huge Natural Gas find has been made. Knowing this I think we can play this two ways:
1.) In the short term look to my suggested Sep Calls
2.) But a better play may be the long term play of Jan09 $70/CALLS currently priced @ $0.95 that you pointed out in your post.
It all depends on how long you want to tie up your capital, IMO.
very nice, are they a refinery? it seems to have an exaggerated movement in comparison to the price of natgas. I'd certainly like to take a position in this soon. do you still recommend the SEPT CALL. How about Jan 09 70 Call @ .95 or perhaps October seems to have some cheap calls between 50 and 70. Which would you recommend. THX for the great stock pick!
ONLY PRICE PAYS
"The dollar has started from a position of being undervalued while a lot of these currencies are overvalued.''
ONLY PRICE PAYS
Not really bad for a Monday. With the way the dollar screamed up over the past week, I wasn't to surprised at todays action. I think by the end of the week we are going to be a lot better shape.
Qs butting heads with Gold, gold goes up, Qs go down. Gold chart is ugly. Qs going up long-term, IMO. Do you think we'll about to cross soon? Any thoughts would be appreciated.
I figured as much! I'm jealous! What happen to the $500 limit? hahahahaha
Here's to a great future on the Q's!!!!!!!
I "accidently" bought 500 LOL
How many of the Q's did you get? Please tell me you loaded the boat! LOL
125 of Jan09 $65/CALLS @ $0.03. They should a nice hold and see how the market recovers. I could have probably got them for 2 cents but this insures I'm in just in case QQQQ continues to rise. I do expect a little breathe here soon sinc ethe daily chart looks a little top heavy, IMO.