Thursday, May 17, 2012

Natty and Chesapeake

I've been traveling so this update is a little late but....
Natty has likely achieved 5 sub waves up from the 2.44 low to the 2.63 high, and the .62 retrace is at 2.50.
Watching that point closely to see if this retrace back down is of larger degree, potentially carrying further for a 50% or even .62, of the entire move up is key.
15 min.

  click to enlarge
It's not easy to count 5 full impulse waves up from the 1.90 low yet, but if that were the case a 2 back can be deep. It would however, likely be followed by at least another structure up,  a C wave, even if this move up were to be followed by fresh lows. 
BTW the 2.63 point represents a Fibonacci 38% move up from 1.90 low.

All in all higher targets are expected as discussed in Natural Gas Catches a Bid
 from May 1st. So 2.27 and 2.20 can be seen as excellent opps for entry especially if the move down is choppy.
 Daily

Chesapeake Energy;
The Chesapeake situation has had so much negative coverage it's begging for a closer look from the buyers pov.
 Daily
 click to enlarge
Note the positive divergence on the RSI above.
Can be counted as an abc.

Weekly
click to enlarge
No positive divergence but oversold RSI.
 The move down from the 35 area can be counted as 3 series of abc's
Like Natty, even a corrective bounce that retraces a minimal .382 would represent a significant % increase in price. A 50% retrace of 35 to 13 is a target of 24 or an 85% return
click to enlarge
The entire move down from the 2008 high COULD be seen as an abc structure with a and b certainly complete.
 If this move down is a C wave, then when is complete, whether at 13 or 9.90, upside targets would include new highs exceeding the 08 high.

 So CHK is now either completing a C wave or an X wave, with risk to the upside very high.
Can it go lower? And the answer is, as usual, of course; the classic zig zag pattern would call for a low under the A wave 10.00 low. But.
Don't be short this stock.


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