CHK- Trade Opportunity

I get a lot of emails in a day, typically 50-75 on an average day; most of them are trades individuals are interested in. CHK is one that I have been updating for a member since May 11th.


Here are some excerpts of my replies as the emails went back and forth-May 11th:


"Wow, there's a lot of game playing/manipulation in that stock. I don't know what the news events were, but 3C called the top at March 20th, then was showing a small positive divergence on 4/27 and it popped on 5/1, it showed that 5/1 move as not supported or a head fake, and then called another negative divergence early morning of 5/10."

The next email on 5/14 with the attached chart...


"CHK still has a lot of proving to do, but this is a start."

The next email on 5/15...


"CHK is putting in positive divergences from 1 min to 15 min, I would think it's going to pop higher on a move that is more defined."




Email May 21...


"CHK on the 1 min is getting a little frothy here, looks like it may consolidate or pullback a bit, the 5 min is still in line so that's good. The 15 min chart is very positive, it looks great. The 60 min chart was positive at Friday's lows, but the 15 min looks the best."


What CHK looked like at that point...

The member bought some CHK on 5/22 as it did take a little breather.


Here's what the 15 min chart looked like as of that email on 5/21

At this point it seemed pretty clear someone was accumulating CHK with several positive divergences on a meaningful timeframe.


Here's CHK as of today (15 min)

From left to right, distribution at the top, trend confirmation in green, several positive divergences and a change in character.


CHK closed up 3.31% today and is up another 2.5% in after hours. Why?


Chesapeake (CHK) Shares Surge as Bloomberg Reports Icahn Now 'Major' Holder
3:39 pm ET 05/24/2012 - Street Insider

Shares of Chesapeake (NYSE: CHK) are jumping in late-afternoon trade as Bloomberg is reporting Carl Icahn is now a "major" holder in the company. Bloomberg said Icahn may now own more than 4 percent of the company.


From Reuters:

BlackRock group ups Chesapeake stake: source

(Reuters) - BlackRock's (NYS:BLK - News) Global Resources team increased its Chesapeake Energy Corp (NYS:CHK - News) stake to 4 million shares from under 1 million shares, a source familiar with the situation said on Thursday


I decided to post this for a couple of reasons, 1) in one of my last posts I mentioned how a lot of intraday and day to day movement is created by market makers and specialists trying to fill a large order. 2) Apparently as you can see, 3C caught the action of filling that order so the 3C signals aren't academic, there's real institutional activity going on and 3) Judging by the accumulation zones, the institutional position is probably somewhere averaged out around $15 so CHK should have some upside in it as they'll look to push the stock higher, that's the reason they announced their position in it.


As for our member who is long CHK, best of luck, it was probably a little grueling at times, but it looks like you're going to do fine with CHK.