Trading Idea: Is Chesapeake Energy close to Support?

Published on Tuesday, 26 June 2012 06:44 Written by TradersHuddle Wire

New York, June 26th (TradersHuddle.com) - Shares of Chesapeake Energy Corporation (NYSE:CHK) ended the trading session close to calculated support at $16.69, a level that will raise the attention of traders looking for an entry point.

Chesapeake's stock range is defined by its calculated support defined at $16.69 and by the resistance level at $19.50. This range could be used as a reference by traders planning their next move. The area where buyer interest might materialize is defined as calculated support. Stocks trading near support might see upside if it can successfully hold the technical level. However, this area if breached will signal participants that the stock failed to entice buyers to step in to support it.

Traders wanting to establish a position should pay close attention to Chesapeake's price action, and establish it as close to support as possible, but only after buying materializes. Traders should understand that the resistance point at $19.50 might limit their upside, however, if the stock breaks resistance, it could be a good point to add to the position.

Shares of Chesapeake Energy Corporation closed at $17.03 in the prior trading session.

Chesapeake Energy Corporation (NYSE:CHK) produces oil and natural gas. The Company's operations are focused on discovering, developing and acquiring conventional and unconventional natural gas reserves onshore in the United States.