Chesapeake Energy Corp (CHK)

[Portguyofva]

Jett,
I agree with your assessment on CHK longer term, but due to the CHK technicals, overall market weakening, and seasonal NG factors I think we may see better prices near-term. CHK is trading between (getting squeezed at) its 50 day MA (18.70) and it's 200 day MA (20.78). It's also trading in a channel between 17 and 20.20 that started in early June. Another technical factor is the lower trend-line that started with the mid-May lows and now sits close to the 50 day MA. Combine the fact that we are in the NG inventory building phase; I'm watching the CHK support at the 18.70 to 18.85 level closely. IMO, if CHK falls below that support we will see a buy opportunity at 17. I'm not sure the overall market or any other catalysts at this time have the juice to push CHK above the 20.20 level, which IMO is where it needs to go to make my near-term 17 target go away. Disclosure: I have not and will not short CHK here, but rather looking to buy back in at a lower price.