$CHK Potential Breakout

BATS:CHK   Chesapeake Energy Corporation
CHK is shaping up for a move out of an ascending right triangle. Currently stalling at the 200 day MA which is coinciding with resistance. It's in the sweet spot for a break above the $21 area as it's coiled about 75% to the apex of the triangle. Indicators are strong, and the weekly chart is also showing a decision point where major support and resistance intersect. Looking for a confirmed break above $21 with stop at $20 (a few ticks below the 200 day MA - algo's tend to overrun or slightly overshoot support and resistance levels in an attempt to shake out weak longs or shorts. Putting stops a bit out of these ranges helps to avoid this sort of pitfall).



RSI weakened and broke below 50. MACD turn down and appears to be headed lower. Testing bottom of triangle support on a gap lower. Momentum is failing and likely not going to pan out to potential. Even if price breaks out, it will likely be a false move. Potential support at 18.50 and beyond that 16.60.

Weekly chart also confirming waning strength. Since we never received a buy signal, nothing is lost. Other trades out there in much better shape.