Someone CHK the Gas
There are finally some decent earnings to cheer about
today. Both GS and NFLX are up big on
beating estimates. For stocks that are
at near all-time highs, great earnings are necessary to propel us higher. Oil and Gas are doing better than ok this
year to help Technology keep things moving.
The Energy group has been the big winner in 2016 with outstanding
performance after a dismal start. Energy
lead by CHK has turned in the best relative performance so far this year (AlphaVision®Landscape
group on the lower left) in the S&P 500.
CHK is a story from a famous ex-CEO to over production just
in time for the crash in Nat Gas prices.
The $40 company is now a $6 company.
At some point they will be an asset play for someone with a very long
view. The Trend Reversal Landscape is
showing a lot of red lately in the Energy group. The poor 5 day relative performance is
probably the group taking a pause after the big move to $50 in oil. CHK clearly is not resting since 3 month
performance (tallest building) is the best in the group and it is still
rallying short term (green color).
On top of the recent performance there is a lot of call
buying activity in CHK. The near term
volatility is bid sky high with the terms expiring prior to earnings. Long ratio call spreads could work in here in
the short term (buying 2 and selling 1).
Maybe the long winter for Nat Gas is over if the producers keep picking
up a bid.
Read more from Andrew at Option Pit
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