Chesapeake Energy stock continues to experience a decline, with the stock currently trading at $83.58, marking an 8.1% deficit for the month of June. Despite this, the stock is approaching a trendline that historically indicates bullish implications and could potentially lead to a new record high. The $83 level has provided support for the pullback, and the stock is on track for its ninth daily loss in the past 10 sessions.
The stock recently pulled back to its 200-day moving average after spending several months above this trendline. Analysis from Schaeffer’s Senior Quantitative Analyst Rocky White shows that CHK has seen four similar signals in the past three years, with positive results one month later in two instances, averaging a 4.9% increase. This potential move could place the stock just below the $88 level, indicating further gains may be on the horizon.
Short interest in Chesapeake Energy stock has increased by 4.4% in the last two reporting periods, with 17.65 million shares sold short representing 14.2% of CHK’s available float. This high level of short interest leaves room for a potential short squeeze, which could lead to further upward movement in the stock price. Additionally, a sentiment shift in the options market, with a Schaeffer’s put/call open interest ratio (SOIR) of 3.41 ranking in the highest percentile of its annual range, suggests that short-term options traders are extremely put-biased at the moment.
Investors and traders should keep an eye on Chesapeake Energy stock as it approaches the trendline with bullish implications. The stock’s recent pullback to its 200-day moving average and historical data indicating potential gains in the near future suggest that there may be further upside for CHK. Short interest and sentiment in the options market also point to the possibility of a short squeeze and increased buying pressure, which could drive the stock price even higher.
Overall, despite the recent decline in Chesapeake Energy stock, there are signs pointing towards a potential rally in the near future. With the stock approaching a trendline with historically bullish implications, as well as short interest and options sentiment suggesting potential upward movement, investors may want to consider the buying opportunity presented by CHK at its current levels. Keep an eye on the stock as it continues to navigate market conditions and potential catalysts for a new record high.
