Chesapeake Energy Corp (CHK) is expected to report their latest quarterly figures after the close of trading Tuesday. Let's review the condition of the charts and indicators.
In this daily bar chart of CHK, below, I can see that prices "rolled over" from August to December and then started a downtrend. Prices now trade below the declining 50-day moving average line and below the weakening 200-day line. The 50-day line has crossed below the 200-day line for a bearish dead or death cross. The trading volume histogram looks slightly more active in the past two months telling me that traders are voting with their feet.
The On-Balance-Volume (OBV) line shows weakness from early December as sellers of CHK are being more aggressive with heavier trading volume being traded on days when CHK has closed lower. The Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero line.
In this weekly Japanese candlestick chart of CHK, below, I can see a weak picture. Prices made a good rally from early 2021 but then rolled over and turned lower. Prices are below the cresting 40-week moving average line.
The most recent weekly candle does not have a lower shadow to tell me that traders are rejecting the lows. No lower shadow tells me that traders are bearish.
The weekly OBV line turned lower in November and the MACD oscillator has crossed below the zero line for an outright sell signal.
In this daily Point and Figure chart of CHK, below, I can see a potential downside price target in the $73 area.
In this weekly Point and Figure chart of CHK, below, I can see that prices have reached a downside price target of $81 but the trend is still down.
Bottom line strategy: I have no special knowledge of what CHK will tell shareholders after the close of trading Tuesday, but the charts are weak and further declines appear likely. Avoid the long side of CHK.
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