The current stock movement for CHK has very little to do with fundamentals, IMO. It's about supply and demand for stock. If you throw millions of shares to bond holders who felt they were in peril of losing their money, many will quickly liquidate and move on. That is what , IMO, is happening. There is a supply of weak hands dumping stock cheap. They will eventually run out of stock to sell and then CHK will start to return to a fairer proc, probably mid to high 4s.
Natural gas will never go back up. Actually no one will ever even use it anymore. The same with oil. Manufacturing just won't happen either. I anticipate that besides CHK, you can expect Exxon, Shell , Phillips, all of them to go out of business along with Alcoa, the mining companies and probably all the banks. Why we need banks if business just comes to an end.
The good places to invest right now would be Mules R Us and good breeding horses. Oats and hay will also be the wave of the future.
1. The market needs to believe that oil has bottomed.
2. The market has to believe that CHK is not going to go bankrupt
Now think about number one. Overtime oil moves to a new high from its recent lows, CHK goes nuts. Every pullback creates a selloff. The market is so shell shocked from the drop from over $100/barrel you can expect this. The irony is that common sense should tell us we've seen the bottom since we've come back 50% or more.
Now think about the idea of bankruptcy for CHK. They just got their $4 billion line extended. Who gets a $4 billion line if the creditor thinks you might go bankrupt?
So, who knows more about CHK, the guys playing it up and down or the banks? And if oil never goes up again, well then we can all kiss our behinds goodbye.