Schaeffer's Top Stock Picks for '25

Time to Buy Chesapeake Energy Put Options

CHK has the worst average first-quarter return of any SPX stock over the past decade

Dec 28, 2017 at 1:36 PM
facebook X logo linkedin


Much of the energy sector has outperformed this month thanks to rising oil prices. In fact, data from Schaeffer's Quantitative Analyst Chris Prybal shows oil exchange-traded funds (ETFs) are having an unusually strong December, compared to their historical returns, as seen in the table below. But many energy stocks are still facing seasonal headwinds, including Chesapeake Energy Corporation (NYSE:CHK). Here's why it may be a good idea to sell CHK stock before New Year's.

average dec returns vs 2017

Looking at returns from S&P 500 Index (SPX) stocks over the past 10 years, shares of Chesapeake Energy have struggled dramatically during the early months of the year. Not only did the security show up on our list of worst January stocks, but it's also on the list of worst stocks to own for the entire first quarter -- and registers the largest average loss for the January-March period, at -9.4%.

worst january stocks 2017

worst first quarter stocks 2017

The security was last seen trading 4.5% higher for the day at $4.05, as it continues to battle the 80-day moving average. The trendline has acted as resistance on several occasions over the past year, guiding CHK to a year-to-date loss of 42%. One silver lining for shareholders may be that the $3.50 level continues to offer up strong support for the shares.

But sentiment across Wall Street is mostly bearish. Just one brokerage firm recommends buying the stock, and there are 17 analysts in coverage. More notably, short interest accounts for almost 19% of Chesapeake's float.

Regardless, it looks like a good time to target short-term options contracts. That's because the Schaeffer's Volatility Index (SV) for CHK comes in at 46% -- ranking just 10 percentage points from an annual low. This would suggest volatility expectations are lower than normal at the moment.

 

 
 

Which of These SUB-$5 Stocks Could 26x From Here? (AD)

He called a rare 11x on Tesla…

Then he called a 26x on Workhorse…

Then an even rarer 35x on Nio Inc…

Now Tim Bohen says these 5 tiny “America First” stocks are next up in 2025.

They’re trading for less than $5 right now.

But thanks to Elon & Trump’s new alliance…

They could be off to the races in Trump’s first 100 days.

And right now for a limited time…

You can get the names & tickers for just $1 here. (AD)

10 Stock Picks FREE
 
 

Featured Articles from Trusted Partners:

🚀 One Stock Pick Could Change Everything in 2025
What if one stock pick could define your success next year? Get 10 expert-vetted stocks set for 2025—plus 5 bonus picks to watch now. Get the Report →

🆕 New Options Need New Trading Strategies
Zero-DTE options are the newest (and hottest) options to trade.  Professional traders have rushed into the market and are making a mint.  Don’t get left behind - learn all about these options, how to trade them, market setups to profit from, plus much more. Download now →

👀 Revealed: 3 Defensive Stocks for Your Portfolio
Worried about the market? This free report reveals 3 under-the-radar defensive stocks for uncertain times in any kind of economy.

 

 
 

FREE Report Download

 

Follow us on X, Follow us on Twitter