Need so much patience. It would be "logical" to see a 3-4% rebound today given the news about the sale plus higher energy prices. No short squeeze (yet) and not much support from the big institutional buyers. Upsetting.
Hi dadmac, I really enjoy reading your posts - you are very knowledgeable. I believe getty was referring to an article from yesterday (can't post a link but you can google "Mexico moving forward with major natural gas pipeline".)
Strong USD, possible rate hike, possible Iran deal, Saudis pumping oil like there is no tomorrow, etc. - a very tough macro tape right now. All good daytraders and swing traders have been shorting CHK based on technical analysis.. CHK has been trending down on virtually every time frame - monthly chart, weekly, daily, hourly, etc. "The trend is your friend" until it reverses.
At the same time, valuation is getting to be ridiculous. Keep in mind that short term traders can switch from short to long bias in a minute... they are very "flexible" in their thinking. CHK stock is clearly worth much more than the current $10.55 - if you think long-term. Just look at today's sale of about 3% of assets for $840 million. ISM manufacturing numbers are strong, ng production is expected to decline going forward, hopefully a hot summer, LNG possibilities, switches from coal to cleaner ng utilization - those are all supportive factors. Remember how in the spring of 2012 natural gas future dropped to $1.85? CHK survived and managed to move from $11 to $30 within two years.
Timing the bottom is super hard. The bottom can only be seen in the rear view mirror, way after the fact. Can CHK drop more? Of course. Wall st. likes to make money by both going long and short. Someone is sitting on a bunch of July $11 puts - they want to make money on those. Today someone bought a very large amount of October $13 calls for $0.41. The stock price needs to be above $13.41(plus costs of transaction) for those buyers to make any money.
In the meantime - you can:
1. Stay on the sidelines and wait for reversal.. Needs to make higher highs and higher lows on the charts. A good start would be for CHK to close above 21ema on a 1hr chart.
2. Actively trade - both long and short... daytrades only with tight stops.
3. Start accumulating a long-term position - small quantities of shares at a time, can hedge this long position with puts.