CHK is quite simply an oil and gas production company headquarted in the Midwest. They are the second largest producer of natural gas in the U.S. with operations primarily in the Southwest and Appalachian Basin. With that said, CHK is a stellar play both technically and fundamentally. Let’s cut to the chase and find out why!

On the technical side, I love this play right now due to the buy signals in the MACD and DMI categories. This stock started its climb in mid-September and it isn’t done playing yet. Back in May 2005, the stock made the same move and climbed 20 points in just under six months. I recommend CHK at $40.00 a share and believe it will hit $55 by March.

Alright, now for all you fundamental gurus who think investing revolves around sound financial numbers; this stock is trading at a discount versus its peers with a PE Ratio of 9.8. Its revenue has boosted the companies EPS as well as outperforming the industry average. Furthermore, the company has solid cash flow; net income year-to-date has increased by 43% when compared to last year’s YTD.

These hard facts only compliment the technical analysis and confirm that CHK is good to go. Call your broker or log on to your account and have at it. Happy Trading…and until next time.

Cheers

Anthony M. Colasanto