CHK still stuck within tight trading range
Chesapeake Energy Corporation (CHK) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
CHK ended Thursday at 0.19 flat, notably underperforming the S&P 500 (6.24%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CHK as at Mar 26, 2020):
Thursday's trading range has been $0.02 (10.0%), that's below the last trading month's daily average range of $0.05. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CHK. Prices continued to consolidate within a tight trading range between 0.17 and 0.21 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern and the Tweezer Bottom which are both known as bullish patterns. The last time a Last Engulfing Bottom Pattern showed up on March 4th, CHK actually lost -8.00% on the following trading day.
Prices are trading close to the key technical resistance level at 0.21 (R1). After having been unable to move lower than 0.18 in the previous session, the share found buyers again around the same price level today at 0.18.
While the stock is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the nearby swing high at 0.21 where further buy stops might get triggered. With prices trading close to this year's low at 0.12, downside momentum could speed up should the market break out to new lows for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. Its common bearish interpretation has been confirmed for Chesapeake Energy. Out of 520 times, CHK closed lower 50.96% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 53.65% with an average market move of -0.85%.