Stock to Sell #2 – Chesapeake Energy Corp. (CHK)
Chesapeake Energy Corp. (NYSE:CHK) is the second largest producer of natural gas and the most active driller of new wells in the United States. Thus, it has been seriously impacted by lower natural gas prices. Earnings are expected to fall to $2.30 in 2012 versus $2.88 in 2011.
The stock fell from about $36 in July 2011 and appeared to be making a bottom when in March of this year it broke its downtrend line. This, however, seems to be a false breakout. The turn from its 200-day moving average while forming a double-top is very bearish. Sell CHK at the market.