Posted On: 02/09/2016 4:45:50 PM
Post# of 23078
CHK: Several things we should consider before buying CHK or any other oil stock:
-This sector is very cheap now, but the price of the oil is also artificially cheap. Big players are dumping oil to squeeze the weaker players out of the market and then the oil price will spike. The OPEC and Non-OPEC countries mostly survive the price war, but smaller players in the US may not...
-Chesapeake is the second-largest producer of natural gas and the 12th largest producer of oil and natural gas liquids in the US, so it maybe able to ride this volatility. But make sure you diversify between several companies. They are all at their lows ...
-The other thing is that since dollar is dropping compare to other currencies, it will make oil cheaper for other countries, so they will use more oil and the 2% extra daily oil in the market could go away and the price will spike again. In addition, any kind of war or disaster in the oil producing areas will disrupt flow of the oil and will push price higher.
-Another option that you have is to play the indexes such as UWTI and DWTI which they go opposite directions. If you think oil is going up, buy UWTI and as soon as you think it will go down sell UWTI and buy DWTI. You can make lot of money by flip flopping these two, but you have to be very careful.
Good luck to you JAVA1.
-This sector is very cheap now, but the price of the oil is also artificially cheap. Big players are dumping oil to squeeze the weaker players out of the market and then the oil price will spike. The OPEC and Non-OPEC countries mostly survive the price war, but smaller players in the US may not...
-Chesapeake is the second-largest producer of natural gas and the 12th largest producer of oil and natural gas liquids in the US, so it maybe able to ride this volatility. But make sure you diversify between several companies. They are all at their lows ...
-The other thing is that since dollar is dropping compare to other currencies, it will make oil cheaper for other countries, so they will use more oil and the 2% extra daily oil in the market could go away and the price will spike again. In addition, any kind of war or disaster in the oil producing areas will disrupt flow of the oil and will push price higher.
-Another option that you have is to play the indexes such as UWTI and DWTI which they go opposite directions. If you think oil is going up, buy UWTI and as soon as you think it will go down sell UWTI and buy DWTI. You can make lot of money by flip flopping these two, but you have to be very careful.
Good luck to you JAVA1.
(0)
(0)
