Chesapeake Energy near Key Resistance Area

Published on Thursday, 29 July 2010 07:00 Written by Christopher Lynn

New York, July 29th (TradersHuddle.com) - Shares of Chesapeake Energy Corporation (NYSE:CHK) are trading very close to calculated resistance at $21.87 with the current price action closing at just $21.28 placing the stock near levels that make it difficult to buy.

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.

Chesapeake's current stock range is defined by current calculated support defined at $20.58 and by the resistance level at $21.87, the stock is clearly over-extended from support, making it difficult to establishing new long positions at this level.

Traders don't have a clear entry point for Chesapeake Energy, as the stock is well above support, however, as the stock pulls back towards $20.58 it will definitely provide a reference point to establish a trade. On the other hand if the stock decides to break above resistance level at $21.87 then traders will get an opportunity to enter Chesapeake Energy stock by establishing a position as the stock moves to a higher range.