Chesapeake Energy Corporation (NYSE: CHK) is having an incredibly strong start to the trading session this morning. However, there hasn’t been any news issued, no press releases, no SEC filings. Nonetheless, there is a good reason for the gains. Today, we’ll talk about:
- Why CHK is headed for the top;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
CHK Is Following Oil To The Top
As mentioned above, Chesapeake Energy is having a great day in the market today, following up on recent gains that we’ve seen. However, with no news out, investors are scratching their heads wondering what’s happening. So, what’s the reason for the gains?
Well, if you look at others in the oil and energy industry, you’ll see that CHK isn’t the only stock rising. They are all finding their way to the top. The gains ultimately have to do with a couple of factors that are sending oil up for the fifth straight trading session.
- Trade Talks – First and foremost, trade talks are set for this week. The United States and China will be working to conclude their differences, and investors are hoping for upbeat news. With recent positive jobs numbers from both the United States and China, recession worries are calmed and the stage is set for what will hopefully be productive talks between the two largest economic regions in the world.
- Oil Demand – Another factor that’s helping oil, and CHK for that matter, head up is that demand is expected to climb. The expectations of increased demand came when China unexpectedly attended negotiations between Beijing and Washington in an effort to resolve disagreements that have caused issues in global markets.
- Output – Also, surveys are showing declines in output. In fact, December’s crude output survey from major suppliers said that the suppliers saw their biggest output declines in December since January of 2017.
- EIA – Finally, the world is awaiting data from the EIA with regard to oil output. Considering the recent survey, it is expected that the data will show a declining stockpile, further providing support for the oil and energy sector.
With all of that in mind, investors are seeing opportunity in various oil and energy stocks, including CHK.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Chesapeake Energy, the news proved to be overwhelmingly positive. After all, recent gains in oil mean that the company has the potential to drive stronger revenues from its product. So, it’s not surprising that excited investors are pushing the stock on a run for the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:02), CHK is trading at $2.32 per share after a gain of $0.07 per share or 3.10% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on CHK. In particular, we’re interested in following the story surrounding the growth in oil prices and how the company takes advantage of the changing tides in the market. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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