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JimVanMeerten (56.34)

Chesapeake Energy is a bargain



June 28, 2011 – Comments (0) | RELATED TICKERS: CHK

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This morning I was screening the most popular stocks on Motley Fool with my Barchart screener and was very surprised to see how poorly Chesapeake Energy (CHK) was performing.  In the last 3 months the stock has hit 14 new lows and is down over 15.77% from its recent high.  Just might be a bargain here?

Barchart technical indicators:

72% Barchart technical sell indicator

Trend Spotter sell signal

Below its 20, 50 and 100 day moving averages

14 new lows and down 15.77% in the last 3 months

Relative Strength Index 38.41% and falling

Trades near 28.39 with a 50 day moving average of 30.68

Summary:  Now might be the time to put in place a strategy to buy Chesapeake Energy (CHK) at a bargain price. The long term prospects of the stock appear to be a safe bet.  Most of the production is in North America, so the worse it gets in the Middle East the better it is for them.  Even at today's prices long term investors should see an annual return in the 10% range over the next 5 years.  Here's how I'd play it:  If you got it hold it, if you don't, then place a buy stop at the 20 day moving average and keep sliding the buy stop down as the stock goes down.  That's the way to buy long range bargains.

Jim Van Meerten is a Marketocracy Master

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