Chesapeake Energy Can’t Buck The Oil Trend 22 December 2014

At a workshop I gave in October I looked at CHK for an attendee who was curious about the stock’s prospects from my point of view.  As the chart shows, the stock was well below my TVZ, but was rallying.  I said then that traders should only be interested in buying CHK if it could get up above $26.50.

CHK W 22 Dec 2014

The stock went on to touch the underside of TVZ before reversing and resuming its downtrend.

Last week’s performance aside, nothing has changed in CHK.  Traders should avoid considering a long position in CHK unless it can rally up through the $25.50 area.  Even then, the stock would only become worthy of stalking for a high probability long entry.

How low can CHK go?  Who knows?  Prediction is not my forte, however, I will say if price can break near term support here in the mid 16s, the next level of support is in the mid $13 area.

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