CHK Bankruptcy Reports Send Stock Sliding

Call volume has been surprisingly high in the past 10 days

Deputy Editor
Jun 16, 2020 at 10:13 AM
facebook twitter linkedin


Chesapeake Energy Corporation (NYSE:CHK) is on Wall Street's radar this morning amid reports that the firm plans on filing for bankruptcy as soon as this week. Chesapeake Energy is now the largest oil and gas producer to crumble from the weight of the energy sectors massive coronavirus-related plummet suffered during the past few months. In response, the stock is down 17.2% to trade at $15.51. 

Save for a brief spike in early June, CHK has been at the mercy of its descending 60-day average since late-October, losing over 95% in the last nine months. The security has managed a one-month climb of 74.9%, though today's drop puts it back below recent support at its 20-day moving average. 

Sentiment surrounding CHK is lukewarm at best. Three call the equity a "hold," while 10 say "sell." Meanwhile, the consensus 12-month price target of $4.94 is an eyebrow-raising 72.7% discount to current levels. 

Surprisingly, calls are being favored in the options pits. In the last 10 days, 125,000 calls crossed the tape, compared to 74,000 puts. Short interest has also seen a major decline since its late-February multi-year highs, off over 100% since this peak. Short sellers are still firmly in control, however. The 3,634,641 shares sold short represent 37.2% of CHK's available float, or 1.3 days of trading at its average pace. 

 

 


A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earnings guide for Q3 before it's too late!


  
 
Special Offers from Schaeffer's Trading Partners