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Jim Cramer on CHK - gotta love it..
Started Jul 12 at 10:05 ET (By guliamo)
"I think the moment's right to start buying natural gas," Cramer said. He's still a fan of Chesapeake Energy. Last night, Chesapeake completed a secondary offering of 25 million shares at $57.25 a share." Today the stock closed at $61.58 a share for a 6.7% gain in just a single day. "That's the all-clear signal we've been waiting for," said Cramer. "The company plans to use the money to increase drilling, a move that's seen as wildly bullish for the stock," he said.
Cramer cited five of Chesapeake's previous secondary offerings, noting that all five have made money. Cramer also voiced his support for Chesapeake CEO Aubrey McClendon, whom he said is the most bankable CEO in America.
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CountdeMonet
Jul 12 at 2:19 ET
I wouldn't touch this stock with a ten foot pole. The stock completed an island gap reversal which is very bearish in the near term. It is way overbought and overowned.
McClendon was asked if he was still buying stock and the response was to say he still thinks the company is undervalued. He's talking his book and probably selling it right back to those late to the party. Also, apparently they locked in most of their nat gas sales below $11 so they haven't participated in the recent run up. Finally, given all the drilling that is going on and the slowing industrial sector in the US and Canada, I am very bearish on nat gas.
The chart would tell me it is heading back to $30 before it goes anywhere else.
JMHO of course.
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guliamo
Jul 12 at 3:29 ET
Troubling prophecy indeed.. I've owned CHK for quite a while and done great with it. It is one of my Big 5 and in my philosophy these are long - very long term plays.. that said, I was thinking of taking some profit as it has grown out of proportion compared to my other holdings. If I would sell, i would stay withing the sector and maybe move some into BTU - what do you think?
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CountdeMonet
Jul 13 at 12:53 ET
I do like the charts of NXY, CMZ, and TLM. I currently own some TLM. All these guys are more oily and NXY is just bringing on its oil sands project. I would expect a nice pop from NXY next week when they report. They also broke out of a solid range of consolidation and are back just testing the top of that range. I will likely look at some prompt month calls next week before they report as it could be a very good opportunity.
The uranium stocks are starting to look interesting as well. I'm not so keen on coal right now just because everyone was piling into that trade. BTU however does have a decent profile. It had a long period of consolidation then broke out, retraced that and consolidated and appears to be moving higher. If I were going to pick a coal stock that wouldn't be a bad choice.