Hello fellow traders. In this technical blog we’re going to take a look at the charts of Chesapeake Energy Corporation Stock CHK published in members area of the website. As our members know CHK has had incomplete sequences in the cycle from the April 8th peak (3.57). Consequently , we advised clients to avoid buying CHK and keep on selling the rallies in 3,7,11 swings when given the opportunity.
In the charts below, we’re going to explain the Elliott Wave Structure and Trading Strategy.
CHK Elliott Wave 30 Min Chart 4.28.2019
Break of 04/18 low ( wave 1 Red ) made April 8th cycle incomplete to the downside. The price structure is now showing lower-low sequences, suggesting the Stock is bearish against the 3.20 peak- 2 red. As far as the pivot at 2 red high holds, we should be ideally doing wav 3 red down as presented on the chart . We don’t recommend buying the Stock and favor the shor side- selling intraday rallies in 3,7,11 swings against the 3.20 peak.
CHK Elliott Wave 30 Min Chart 5.07.2019
Short term bounce completed as truncated Double Three and we got further decline. Cycle from the 3.20 peak ended as 5 waves structure -Leading Diagonal. We got clear 3 wave bounce (a)(b)(c) that has reached equal legs at 2.89-2.99 ( sell zone). At this stage we are calling wave ((ii)) completed however need to see further separation lower from the Blue Box.
You can learn more about Elliott Wave Patterns such as Leading Diagonal and ZIG ZAG at our Elliott Wave Educational Web Page.
The main trend is bearish and we expect to see reaction in 3 waves down from the blue box at least. As soon as the bounce reaches 50 fibs against the (b) blue low, we will make short positions risk free and let the profit run. As our members know Blue Boxes are no enemy areas , giving us 85% chance to get a pull back.
CHK Elliott Wave 30 Min Chart 5.07.2019
Sellers appeared right at the blue box when Elliott Wave ZIGZAG completed at 2.94 high. We got expected decline and as a result members are now enjoying profits in risk free positions.. At this stage CHK is bearish against the 2.94 pivot, suggesting more weakness potentially. Now as far as 2.94 pivot holds, intraday bounces can find sellers in 3,7,11 swings for proposed decline or 3 wave pull back at least.
Keep in mind that market is dynamic and presented view could have changed in the mean time. Best instruments to trade are those having incomplete bullish or bearish swings sequences. We put them in Sequence Report and best among them are shown in the Live Trading Room. You can check most recent charts in the membership area of the site.
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