How is Chesapeake Energy Corp. (NYSE:CHK) Executing its Strategy?


On Thursday, shares of independent oil and gas company Chesapeake Energy Corp. CHK are tumbling, down about 8.5% in mid-morning trading after they reported first-quarter financial results that beat expectations.

CHK stock initially responded to its sold earnings report by surging roughly 5% in pre-market trading. Chesapeake posted adjusted earnings of 23 cents per share, beating the Zacks Consensus Estimate of 19 cents; net income was $75 million. Total revenues came in at $2.75 billion, while oil, natural gas, and natural gas equivalent revenues rose to $1.47 billion.

Chesapeake Energy Corporation (NYSE:CHK) has been in the news for all the right reasons. Recently, Chesapeake Energy Corporation (NYSE:CHK) announced that

The Barchart Technical Opinion rating is a 64% Sell with a Strongest short term outlook on maintaining the current direction. Longer term, the trend strength is Strong. Long term indicators fully support a continuation of the trend.

The Exponential Moving Average (EMA) is similar to a simple moving average (average price over a set period) but it utilizes a weighting factor that exponentially declines from the most recent data point (recent prices are weighted higher than oid prices). EMA analysis compares the short term (5 days and 13 days), intermediate term (20 days) and long term (50 days) EMA’s. The respective EMA’s will give bullish signals when trading above trailing EMA’s and below the current price and vice versa. EMA alerts include crossovers (i.e the 5 day EMA crosses above/below the 20 day EMA) and EMA convergencies (5 day EMA equivalent to 13 day EMA). The 5 day EMA 5.32 is higher than the last trade price suggesting a short term bearish pattern building up. Long term, the 50 day EMA 5.69 is also higher than the current trading price depicting a bearish trend overall..

The relative strength index (RSI) is a momentum oscillator that is able to measure the velocity and magnitude of stock price changes. Momentum is calculated as the ratio of positive price changes to negative price changes. The RSI analysis compares the current RSI against neutral(50), oversold (30) and overbought (70) conditions. Alerts will inform you when stocks recede from oversold/overbought levels or breakthrough neutral (50). The current RSI is 37.60 suggesting a bearish price action.

Chesapeake Energy Corporation (NYSE:CHK) is all set to announce its earnings on May 04/b. As per Zack’s analyst ratings, Chesapeake Energy Corporation (NYSE:CHK) currently has an average brokerage rating of 2.78. On a scale of 1 to 5, a rating of 1 or 2 would indicate a buy, and a rating of 4 or 5 would signify a sell recommendation. A rating of 3 would indicate a hold on the stock. The consensus target price on (NYSE:CHK) is $7.261 with a high of $10 and a low of $2.5.

Chesapeake Energy Corp. is an independent oil and gas company engaged in the development, exploration, acquisition and production of onshore natural gas and oil reserves. Chesapeake owns interests in producing oil and gas wells concentrated in three primary operating areas: the Mid-Continent region of Oklahoma, western Arkansas, southwestern Kansas and the Texas Panhandle; the Gulf Coast region consisting primarily of the Austin Chalk Trend in Texas and Louisiana and the Tuscaloosa Trend in Louisiana; and the Helmet area of northeastern British Columbia.

As such, while we believe Chesapeake Energy Corporation (NYSE:CHK) represents a compelling growth story exposed to several secularly attractive markets, it would be interesting to see how it fairs for long-term investors.