Chesapeake Energy Presents a Trading Opportunity

Chesapeake Energy (CHK), an independent oil and natural gas producer, completed a three-stage upside peaking in October 2005 and then the stock moved down to form a very choppy sideways pattern.

CHK is in its fourth price cycle since it peaked in October 2005 and the two-year price chart suggests that the stock could move to the downside.

Other oil and natural gas producers including Anadarko Petroleum (APC), Apache (APA) and XTO Energy (XTO) have similar looking two-year price patterns.

If oil prices hold their current levels, these stocks would most likely remain in their sideways trading ranges. Therefore, CHK is best purchased when it is at or near the low of its trading range.

Related Articles:

Price Patterns - A Sideways Pattern Can be Profitable
Price Patterns - Multi-Year Sideways Pattern Spells Trading Opportunity

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Posted November 28, 2006.