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[RT] CHK



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  Please see chart hopefully attached below.  Nice paraboic top at 40 is followed by approx. 13 dollar drop to circa 27. 

Elliott Wave says consolidations are continuation patterns.  In orther words, since the market dropped before the consolidation, the resolution should be to the down side. If the first drop of 13 was Wave I, then CHK is now in

Wave II consolidation.  Wave III should be the longest and strongest move, typically about 1.618 times Wave I. 

Wave I = 13 x 1.618 = 21, so subtract 21 from beginning of Wave III, which could project to the 14 – 10 area.

10 is was the top of the 2001 Wave I on the upside, which should be major support. 

 

   Bottomline, if you are making money trading CHK from the long side, it is because it is currently stuck in a Wave II consolidation.  I don’t know how long it will be in Wave II, but this is a ticking time bomb, which when it goes off, this stock is probably headed much lower.  You will know its headed much lower if it breaks thru the 24 area, which was the top of  Wave III on the upside. You can’t have overlapping waves on a primary trend.  Violating the 24 area would give overlapping waves and one more indication that the primary trend is down.   

 

   Enjoy the trading range with one hand on the rip cord and a plan to reverse to the short side.

Moral of this story:  Holding on to your natural gas too long can be dangerous.

 

Regards,

 

Norm 

 

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From: realtraders@xxxxxxxxxxxxxxx [mailto:realtraders@xxxxxxxxxxxxxxx] On Behalf Of BobsKC
Sent: Sunday, May 21, 2006 2:25 PM
To: realtraders@xxxxxxxxxxxxxxx
Subject: Re: [RT] post questions

 

Chesapeake Energy... Both of you are depending on charts and I'm depending on earnings.  The stock has come down along with all the other natural gas issues because the product has come down so far.  Many do not seem to be aware that they have sold 70% of the next two year's production at nearly twice what the spot price is today.  Throw in the CEO making a huge purchase in the open market and the fundamentals can not be ignored.  None of these things take into account the approaching hurricane season and what will happen to the cash price for natural gas once the first named storm moves into the gulf.  If those fundamentals are not enough, CHK currently sports an 8.4 PE   It's been over $40 in the past 12 months and has a 10+% growth pattern. 

So now, we have two views by technicians and one by a fundamental trader.  All views are interesting and no one is always right or always wrong and neither are styles of investing.

Good luck next week everyone,

Bob

At 10:27 PM 5/20/2006 -0700, you wrote:

You see,  Here is what I mean. 
 
I assume that this is Chessy Energy that you are talking about. 
 
I have price in a range between 34 and 25.50.   It is in an up move until 25.50 is taken out and then this retracement has a target price of 26.   Right now it is at support from a longer term move down at 28.75.  You should get a retracement here and the retracement shouldn't take out the 33 level.   If 25.5 is taken out the next target to the downside is 22.
 
This current retracement up should meet resistance at 30 dollars and hit a target of about 30.50.  About a 1 point move from here.   If long I would exit there. 
 
So you would be 100% invested when I am exiting 100% and looking for a congestion area or further down retracement before another up move would start.
 
We are both looking at the same chart and seeing different things.  Right now the major move is down and anything to the upside is nothing to get excited about.  The upside is tradable and can be profitable.   Like everything else in life, what is seen is in the eyes of the beholder.
 
Once again, just one man's opinion.  Ira.
 
PS.  Finals on Monday and then a vacation.  See all when I return.  Have a good week.
 
----- Original Message -----

From: Ben

To: realtraders@xxxxxxxxxxxxxxx

Sent: Saturday, May 20, 2006 8:35 PM

Subject: Re: [RT] post questions

Hello Bob

I have attached a chart of the perfect stop loss

the levels were I would buy would be

at a close above 29.27   will buy 25%  of position with stop loss at 27.98

 

will add 25% to the position on a close above 29.78

buy  full 100% of position at  close above 30.68

 

sell 25%  at profit at 31.10

sell another 25% at  31.89

sell  rest at  32.36  or move stop loss to  31.1   with increasing that  stop loss every time the stock makes a higher hi

Ben

----- Original Message -----

From: BobsKC

To: realtraders@xxxxxxxxxxxxxxx

Sent: Saturday, May 20, 2006 10:32 PM

Subject: Re: [RT] post questions

A kind and generous offer Ben. 

It seems to me that traders try harder every year to get ahead of historical swings and this time, it's the summer doldrums they are trying to beat.  So, instead of waiting for the dreaded summer months, they are bailing now to beat the rush.  The good news is even these swings can be predicted if one just looks at the past performance of the markets versus chronological changes and geo political events, etc.  Whatever the trend is, the traders will be trying to get ahead of that trend. 

The fundamentals are still good.  P E's are in line and earnings are growing.  Inflation is low and controlled.  Employment is strong

while on the negative side, housing is falling off and some consumers are being pinched with ARM's.  I was 100% cash until late this week when I began buying again and will continue to buy as it falls. 

To get your kicked off with your offer, here is one for you.  I already own CHK at $28.80 and will buy more if it dips below that.  The CEO recently bought a large block and they have sold 70% of this year's and next year's production at $10 so as natural gas falls below $6 cash, it means little to CHK in terms of earnings.  What do you think about it?

Best to all,

Bob

At 03:19 PM 5/20/2006 -0400, you wrote:

hello

you are about to make a trade?

before making it

post it

get a second opinion

the answer will be posted with charts to explain reasons why yes or no

Ben

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