The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only the use of which is the responsibility of the individual. Investment accounts under Christopher Tyler’s management do not currently own positions in any securities mentioned in this article. Rather, it’s more like a smart lifeline for contrarian investors in a good-looking speculative name. And if support subsequently fails to hold, I’d pull the plug on the position and exit.īottom line, with just 28 cents of risk between Thursday’s close and the March low of $2.63, this entry is not so much about a string or strings being attached. This caveat means any low which develops must remain above the early March pivot, which is now also reinforced by the 50% retracement level. Once it does, investors should buy shares upon price confirmation that a new pivot is in place. What I’m expecting is for CHK stock’s next higher low within the uptrend to form. Now, several sessions after forging another higher high to solidify Chesapeake’s new trend, shares are pulling back and offering intrepid investors a lower-risk entry point. In turn, an uptrend supporting the bottom in Chesapeake stock has developed. The same price action which confirmed the monthly chart bottom in CHK stock also had the effect of establishing a higher-high pattern followed by a higher low on the daily price chart. And importantly, Chesapeake Energy stock is enjoying a supportive price chart that’s now offering today’s investors a lower-risk entry, but one with a string or two attached. But it has been making serious strides in the right direction with those obligations.Īdditionally, CHK’s most recent corporate confessional in late February offered solid growth, topped the Street’s profit and sales views and raised guidance, moving the company closer to being free-cash-flow positive. No doubt, Chesapeake Energy still has a load of debt to deal with. Nevertheless, the time has arrived for contrarian-oriented investors to consider gaining long exposure in CHK stock and maybe inflicting similar damage to bears overstaying their welcome. I can’t guarantee the same type of result in today’s market.
The bearish CHK stock spread ballooned from 25 cents to 96 cents for a return of 284% in less than two months. At the time, since I was more than a bit concerned about Chesapeake’s prospects, I offered bearish investors a way to position for downside in shares with reduced and limited-risk using Chesapeake’s options market. It has been nearly two years since I last wrote about debt-saddled energy play CHK stock.
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